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7/1 arm loan, suggestion?

7/1 arm loan, suggestion?# Living

l*n2010-04-15 07:04

1 楼

We just bought a house and are working on the loan. Because LD likes to
change to a big house years later, we decide to chose 7/1 ARM. I am not very
sure if this is a smart idea or not because who knows what could happen 5
or 7 years later.
Any suggestions?
Thanks

l*n2010-04-15 07:04

2 楼

ding

B*y2010-04-15 07:04

3 楼

I wanted to do the same thing back 4 month ago. But my lender said 30 year
would be better since you can convert the current home to investment
property later on and take advantage of the low rate for longer time. Not
sure whether it is right, but I got 30 year.

l*n2010-04-15 07:04

4 楼

Thanks for sharing.

g*s2010-04-15 07:04

5 楼

Depends on the rate gap between 7/1 ARM and 30 years. Say 1% difference
recently, means you pay 1% lower for 7 years, and can afford roughly 1%
higher for another 7 year. You will not stay the room for 14 years, right?
More details. 7/1 ARM rate is always lower than 30 years rate. Assume 7/1
ARM rate now is 4%, 30 year rate is 5%. After 7 years, you can either
refinance to another 7/1 ARM or 30 years. As long as the 7/1 ARM rate then is not
higher than 6%, you will earn more than 30 year fixed.

【在 l****n 的大作中提到】

: We just bought a house and are working on the loan. Because LD likes to
: change to a big house years later, we decide to chose 7/1 ARM. I am not very
: sure if this is a smart idea or not because who knows what could happen 5
: or 7 years later.
: Any suggestions?
: Thanks

l*n2010-04-15 07:04

6 楼

Thanks for sharing.

l*n2010-04-15 07:04

7 楼

Thanks for sharing.

B*y2010-04-15 07:04

8 楼

historical difference between 30 year and 5/1 arm
http://mortgage-x.com/general/national_monthly_average.asp?y=2009

l*n2010-04-15 07:04

9 楼

Hi, BaiTrytry,
Did your lender mention they would give you new rate every 6 month after 7
years of the 7/1 ARM? I knew you did not take the 7/1 ARM.
Thanks

B*y2010-04-15 07:04

10 楼

I didn't ask that question at all.