Which mortgage rate would you pick
P&S on 8/8 and closing on 9/14. Got a loan estimate from my agent's referred broker with 6.375% 30 year fixed, and sub 6 ARM quotes from a local credit union via ownup. First time home buyer. Broker has hundreds of 5 star reviews. Agent recommended not to go with unknown lenders. Couldn't find any mortgage review from the credit union on the web. I'm concerned that local credit union won't be able to close on time from reddit browsing. But few hundreds bucks per month is still lingering in my head and causing anxiety. Edit: I am also not sure whether I want to do ARM. #housing #mortgage #rateshopping #closing #anxious #firsttimehomebuyer #boston
Who is the 30 y quote from?
Local credit union quoted 6.25%, and my broker matched to 6.375% with a $900 one time fee from a local lender. 0.125% difference is not enough for me to go to the credit union.
What's wrong with the credit union?
I got 5.8 for 30yr fixed from local credit union
Are you also in Boston?
My FICO is 753. Guess that kills a lot of wiggle room.
Never get an ARM if you have to ask people on blind. You donāt know what you are doing and thatās not something you should experiment with
ARM loans in a rising interest rate environment on jumbo loans. What could go wrong? š«£
Not a jumbo loan. Borrowed 600k for a 2br 800k townhouse.
it really depends. do you plan to keep the home forever? Are you planning to take the full 30 years to pay it off?
I don't have answers to those questions, especially the first one. This is probably why I shouldn't go with ARMs.
honestly, it you don't have long-term goals for this home. reconsider buying. Most first time home owners sell in 5-10 years
Seven years is an eternity in financial predictability. The delta between the high and low is .65% - calculate the difference and then decide if that money is worth the risk?
These are good rates.
I never thought I would get an ARM but ended up doing it. Go for an ARM if: 1) You plan on selling before the rate changes 2) You are ok with the max potential rate 3) You are willing to pay it off before the ARM kicks in. Personally, I got a 10 year ARM. The rate was better. Me and my man are getting married next year, and will make combined around 300k, on 850k home. We are able to pay it off in 7 years. If something unexpected happens and we are no longer able to, and rates increase beyond what we can pay, I have a 3 br house in our hometown I bought in 2015 that has a $750/mo mortgage, so we have a safety net available. We can always bail out of this and move our family there. If not being able to pay the rate increase would leave you up the creek without a paddle, get a fixed 30 year. Otherwise, if you can bail out without too much suffering if it comes to that, save some money and get the ARM. I don't think local vs national lender matters at all. If the local lender goes down, someone will buy your mortgage.
Get the ARM. Interest rates are not going to remain this high for 7 to 10 years. But refinance as soon as you can.
ARM is dumb. Stick with fixed, refinance if possible at a later time
ARM makes sense in certain situations. In places where prices go up (like bay area) and one doesnāt want to keep the home beyond 7-10 years.
Prices are always speculative and can drop in any market - in fact Iād personally wager overheated markets like SF may be the least likely to appreciate over the coming years (but who knows?). While you may intend to sell inside the ARM period so it doesnāt matter Iām always hesitant about them. Life changes and you may want or need to hold it longer. Maybe it makes more sense given market conditions at that time to rent than sell. The value of fixing your mortgage rate for the life of the loan is huge and the difference in rates makes ARM a fairly universally poor choice right now. Obviously my opinion and there is no one size fits all solution, but if it were me Iād avoid ARM.