Got our 1st home in 2021 but for a silly reason got a 10/1 ARM, 30 y fixed for similar rate came with more on closing. We knew we will need a different place to live long term so thought we will have to sell before 10 years go by anyways and did not want to pay extra even though we had cash. Low and behold we got lucky and keeping 1st home suddenly seems within reach, if only or mortgage did not go up in 2031.. Feel extremely down on myself for narrowing our options like this, having little experience in re or borrowing money at that time. It was opportunity of a lifetime to snag low interest debt and lock it in for years. How do I come to peace with this??
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2031 is a long ways away. 10 years ago we would have never predicted a worldwide pandemic or Donald Trump as our president. Who knows, there may be another recession that will drop rates
Yes, (1) low rates coming back or (2) our TC goes up more. Idk if 1 is really possible..
Same boat as you. Iām just being hopeful interest rates come down. I have 8 years left on mine.
7 years for us but unless market keeps going up and up like it did last two years or low interest comes back or we increase our HH TC substantially I already know the answer. I guess there are enough scenarios this can still work out. Maybe this is my cope out. Lol
Where did you land? Mine was 4.75%
I told you but you never listen
No, no one told us. Even the loan guy did not point out to us how this is historically lowest interest rate and how this move will severely limit our options.
Loan guy is not on your side. He just wants to close the loan, so the second he hears a yes he will full send and not talk you thru alternatives
I just got a 7/6 arm two months ago lol hopefully turns out okay
Idk your situation... It's ok for us. We are looking at possibilities of being comfortable vs being very comfortable. So it's all not bad but human brain, especially one wired for perfectionism, does not want to focus on that.
For me this year it was either a 7% rate or 7/6 arm + free buydown so it became 3.75%, 4.75% then 5.75% for remaining 5 years
Same situation. I regret getting 10/1 arm in 2020. The monthly payment difference between arm and 30y fixed was only $400 but I was too cheap to pay š
We had to pay about 10k extra at closing... At that time our HH TC was low compared to now so we did not even think we can ever have two properties in Bay Area so did not worry about time horizon beyond 5-10 y
Thereās a chance that when mkt crashes heavy we could see rates hit new lows and you can refi. Just hang in there for now. Worst case save up and pay a lot of the debt down after the ARM expires.
Market crush is not a good scenario for me because then savings, stored in SPY type index, will be low too.. sure I might be able to refi my starter home but will not go for a new one
Sorry to hear. Always get a fixed.
Yes, always get fixed in case you need the option
Dude your house is already underwater. You have bigger things to worry about, especially when the long and variable lag of the Federal Reserve shows up. Save every penny
Thankfully no.. house has appreciated substantially.
Then sell it. Your debt is worth today 70 cents on the dollar. Your house is worth 70 pct of what it was at these rates marked to market. You should just sell it to some sucker before the market catches up, and resi real estate reprices like multifam and commercial has already done.
Pay it down sooner?
Either that or get a more suitable home for the family. While if we got 30y fixed we could have kept two properties instead of one.
Or just refinance once the rates go down temporarily