San Diego Housing Market News and Analysis
7/30 ARM v 30 year fixed
User Forum Topic
Submitted by gzz on September 6, 2022 - 5:58pm
the agent told me I “locked the whole rate sheet” so I can make a last minute change between any of the following:
4.5% fixed for 7 years, floating the remaining 23 years, no points, 25% down
I was going to go with the 7/30. Good chance I can sell or refi within 7 years. And even if I don't rates could drop.
While the difference is pretty small, on a 1.2m loan that 0.125% comes to about 1500 a year, 10.5k in extra payments over 7 years. That's a ton to pay, and if you compound it is more like 13k over 7 years. So even if I refi at year 9, and the fixed rate saves me a huge 0.75% for 2 years, that's still basically break even.
The very sudden rate jump the past few weeks however has spooked me however, now I am like 50/50 between the arm and the 30 year fixed.
And why not go with the 20% DP and buy more oil stocks as long as I am locked at about 0.6% below current rates?
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