---

10-Year ARM vs. 30-yr On the fence and Need Help

Author	Message
	Add to del.icio.us Add to YahooMyWeb Add to Simpy Add to BlinkList
Guest	Posted: Thu May 19, 2011 9:10 pm    Post subject: 10-Year ARM vs. 30-yr On the fence and Need Help Like 0 Dislike 0 Hello- I am a first-time home buyer (new construction) and am looking to close within the next month. I wanted to elicit some advice and insight from the community about my mortgages options. Since this is new construction, I had the option of locking a rate early (ARM only, downpayment of 1pt upfront). I ended up locking in at 3.75% for a 10 yr ARM. I know this is an excellent rate but I'm now considering a 30 yr fixed mainly b/c I'm not sure if I will be owning the house for longer than 10 yrs. Also, as part of the early lock agreement, I have the option to change my mortgage plan at no charge. The current rate for a 30-yr is 4.625. I know this rate is attractively low as well but it's about $220/mo. more than the ARM. Any thoughts would be greatly appreciated.
jameshogg Joined: 20 Dec 2005 Posts: 10477 Location: Nevada 990.06 Dollars($)	Posted: Thu May 19, 2011 11:01 pm    Post subject: Like 0 Dislike 0 Hi Guest, It will be solely your discretion. You can go for a fixed rate mortgage with a rate of 4.625%. As you won't have to pay any charges for the change of the loan. If you have no issues in paying the higher monthly payments, you can change your mortgage plan. Thanks
chrisgummerson Community Expert Joined: 29 Apr 2010 Posts: 704 Location: La Palma, CA 9.98 Dollars($)	Posted: Fri May 20, 2011 9:25 am    Post subject: Like 0 Dislike 0 You can always consider the 30 year and pay more on your loan, monthly, yearly or set up bi-weekly payments _________________ Chris Gummerson Bay Valley Mortgage Group bayvalleymortgage.com 714-367-5125
Guest	Posted: Fri May 20, 2011 12:22 pm    Post subject: Like 0 Dislike 0 Thanks for the responses. I think if I went with the 30yr, I wouldn't have much room to make extra payments. Whereas, if I went with the 10 yr, I could make extra payments towards the principal. It's a tough choice b/c I worry that interest rates will be relatively high (compared to the current rate) in the future.
Guest	Posted: Fri May 20, 2011 1:21 pm    Post subject: Like 0 Dislike 0 it would be the opposite. A 10 year loan the payments are much higher than on a 30 year amortized loan
Guest	Posted: Fri May 20, 2011 7:39 pm    Post subject: Like 0 Dislike 0 Not on a 10 year ARM...first 10 yrs are fixed at a lower rate. The yrs after vary by market...

Quick Reply
Your Name
Subject
Image Verification	Enter the code above here : Can't read the image? click here to refresh
Message body

All times are GMT - 7 Hours

Page 1 of 1

---

We have chosen to apply the Creative Commons Attribution License to all works we publish. This work is licensed under cc by 2.0