[quote=Rich Toscano][quote=bearishgurl][quote=briansd1]bearishgurl, the reason I say that Greenspan was right, is because I have a buddy who went with adjustable in 1989 (he bought at the high back then but rode it out). He has not refinanced even once…. And all along he’s enjoyed the lowest rates because rates went down the whole time.[/quote]

Understand this, brian. I myself have used adjustable-rate mtgs since 1986 . . . continuously. If I could get another one on my next purchase with the same or very similar terms as the one I have now, I would do it again . . . in a heartbeat. But that’s probably not possible. The “FB” of late (who had a “subprime” version of the same mtg) has given them a bad name so they are likely no longer available to prime and alt-a borrowers who understand how to use them responsibly :={[/quote]

I am hard pressed to think of a more backward-looking decision than choosing a variable loan over a fixed rate loan right now. (Except maybe to lend someone money for 30 years at 4% fixed). Just because something worked in the past doesn’t mean it will work in the future. Looking at economic fundamentals will serve you better than looking in the rear view mirror.[/quote]

Rich, in my case, I intend on putting my property on the market in 2.5 years. I am already more than 10 years into my current mtg and it is amortizing faster now. My interest rate is current +/- 4% and has a 2% annual cap. My current monthly PI is $1200 mo.

It is a fairly large home on a larger than std lot.

If I end up turning it into a rental instead of selling in 2014, I will simply retire the mtg at that time if interest rates go thru the roof and place the property into rental service.