currently have an 5 year-ARM that has 3 years left, no prepayment penalty, capped out at 8.5%(1% max increase per year), rate is 4.65%. Not interest only deal, initally had that, and quickly refi’ed within 6 months, went throug a former “buddy”(he was a friend of friend, never again, we were not looking for exotic loan, he was just an idiot, and me an idiot for going through him) of mine and he screwed our paper work early on which caused us to get an interest only first, but then i rei’ed into a 5 year arm. I am aware of the payments when they do go up, not worried, could refi now , got a quote at 6.5% (no points) but will refi when my rate is higher than the 3o year fixed. Qualifying for a 30 year fixed is no problem.
I would like to hear if this is a good strategy or not, refi now or later(either way the payments would not be a burden on us. I just thought I would run with this since it is 2% lower than a 30 year rate now, and if by then rates keep increasing maybe my cap rate is higher then the 30 year fixed. If not then refi would be the case then. ANd the case of not being be able to refi b/c of lack of equity would not be an issue, I bought before the whole crazyiness began on the price run up(and i did not use a any equity to buy new cars like my crazy neighbors did).
