I’ve narrowed it down to 2 different loans. The REO bank is giving me $16k for closing/loan cost so it was relatively easy to narrow the loan down to these two below. I have to use the $16k or loose it, the other loan options leave $ on the table.
$2800to$3000 in rent + $2500to3000 payment = $5500to6k Monthly payment
So I’ll be paying it off in $6k monthly chunks if there isn’t anything unforeseeable happening. The minimum payment is $1600 on the ARM or $2100 for the fixed, but those figures don’t matter because I’ll be paying 3 to 4x the minimum payment. The payment on the ARM caps out at $2800 if all hell breaks loose in 5 yrs and all the caps are maxed out.
SO
2.5% apr on a 5yr ARM caped at 7.5% max for 30 yrs
OR
4.5% apr on a 30yr fixed
I’m even debating on paying the minimum on the 5yr ARM, saving the $4600 a month I’d otherwise be paying monthly. I’d be hoping for a interest rate increase and invest the $4600 in CD’s or a Savings account (Read super save insured) until year 5, and paying a couple hundred thousand $ lump payment before the interest adjusts on year 5. Here’s crossing my fingers for the EmigrantDirect savings to jump above 2.5% in a year again… How I loved my 5% intrest rates on my savings years ago.
