Should I risk losing an ARM?
August 7, 2013 1:59 PM Subscribe
Should we consider an ARM in the current mortgage market?
posted by IzzeYum to work & money (18 answers total)
We are buying a rather expensive house due to real estate costs in the area - so needless to say we are pushing the boundaries of affordable. We are not putting a large amount down - we would love to put down 20% - but that would not happen for a good while and we are not exactly 25.
Debating an ARM vs. fixed. We plan on being in the house probably 5-10 years. We have access to an ARM that does not require 10% down. The 10 year ARM is about $200-$300 a month cheaper than the 30 year fixed. Cap of 2% growth in interest rate a year with a 9% 10 year cap. No penalty for refinancing.
It would be really nice to be able to put that $200-$300 a month into savings. Upside is $24,00-$36,000 a year over the ten years. Obviously the downside could be a bit - assuming we refinanced to a 30 year fixed it rates were clearly going up I figure it could end up costing us $12,000-$24,000 on the downside.
Also not sure if there are any other types of ARMs than the one I described that anyone has experienced and could or would not recommend.