My friend is a mortgage officer, so I can ask her, but I need more details, without invading your privacy. First, if home prices continue to go down 10% – 15% per year, would you have 80% equity in your home in 2 years? So if your home lost 30% of value today, would you still have 80% equity, meaning you have it at least half paid off at today’s value. Next, is your job stable and will your wages be enough to qualify for the higher payment that a 30 year fixed would be, assuming that fixed rates are at 7% in 2 years? If the rates are less, even better for you. Are you sure the rate caps at 8.5%, because that seems pretty good, almost too good to be true. I thought the rates can go up 7% max, but yours is going up 4% max?
I guess you have to decide also if you think rates will be higher or lower in 2 years than they are today. If I knew the answer about where rates are going, I’d be rich, so I have no suggestions on that.
I am definitely not qualified to give you any advice on this, but I will check with my friend.
