10 year ARMs in 2014 – 2016?

[ucodegen]

One thing to consider is that Shiller feels that the bottom will be around 2013 at the earliest (5 years from now). Unless we have massive inflation (That is an interesting ‘if’), houses will have a dollar value in 2013 that is less than their mortgage. This makes refinancing a house around that period problematic because the property will be underwater. The historical period of house prices is 12 years peak to peak (or if you prefer, valley to valley). This makes 6 years down from peak (and about 6 years back up).

I would be careful about buying into any loan where you would have to refinance when the lock goes away because you can’t afford the adjustment. You can easily get caught on the downside with these. The adjustment and what rate you can get in the future will depend upon what the Fed rates are in the future (which can be hard to predict). Not only that, if Fed rates go up, what the comps for the house you have the mortgage on may be lower than the outstanding balance of the loan (Interest rates and property prices move in opposite directions, interest rates up, price goes down.. and visa-versa).

Best way to look at this is with the following questions:
1) Can you presently afford the fully indexed rate (What you would have to pay if the adjustment went to the cap)
2) Will your wage increase enough during the lock that you will be able to handle the fully indexed rate.

If #1 is the situation, you don’t have much problem either way. I would recommend trying to save and invest the difference between the fully indexed rate and the current rate you would be paying. For #2, I would try to save off as much as possible whenever possible. Built up a safety net.

Neither #1 nor #2 is flirting with disaster. I would do as the last sentence in the previous paragraph and save as much as possible. You may have to come up with cash on a refi, depending upon where rates are in the future.

[The OC Scam]

ucodegen

Thanks and I agree with the 12 year peak to peak. I’m sure that will give us enough time to forget and redo…

[The OC Scam]

ucodegen

Thanks and I agree with the 12 year peak to peak. I’m sure that will give us enough time to forget and redo…

[The OC Scam]

ucodegen

Thanks and I agree with the 12 year peak to peak. I’m sure that will give us enough time to forget and redo…

[The OC Scam]

ucodegen

Thanks and I agree with the 12 year peak to peak. I’m sure that will give us enough time to forget and redo…

[The OC Scam]

ucodegen

Thanks and I agree with the 12 year peak to peak. I’m sure that will give us enough time to forget and redo…

[tugg49]

I’m getting ready to re-fi my 5 year fixed and look at a 6% or even a 5.5% 30YF as a great selling point if it’s an assumable loan. Who knows where we might be in 5 or ten years. Remember when we had over 10% interest rates?
As a survivor of the Nixon administration I look forward and cringe at the leadership choices I have. GW warn’t so bad with the economy.
The 10 year I/O is also an option as I approach retirement and the stairs get to be a pain. But that means selling and moving although a single story would be nice on the bad and getting worse days!

Anybody know where I can do a buydown to 5% for a 30 YF?
My obsessive compulsive disorder is kicking in so don’t ask why!

[tugg49]

I’m getting ready to re-fi my 5 year fixed and look at a 6% or even a 5.5% 30YF as a great selling point if it’s an assumable loan. Who knows where we might be in 5 or ten years. Remember when we had over 10% interest rates?
As a survivor of the Nixon administration I look forward and cringe at the leadership choices I have. GW warn’t so bad with the economy.
The 10 year I/O is also an option as I approach retirement and the stairs get to be a pain. But that means selling and moving although a single story would be nice on the bad and getting worse days!

Anybody know where I can do a buydown to 5% for a 30 YF?
My obsessive compulsive disorder is kicking in so don’t ask why!

[tugg49]

I’m getting ready to re-fi my 5 year fixed and look at a 6% or even a 5.5% 30YF as a great selling point if it’s an assumable loan. Who knows where we might be in 5 or ten years. Remember when we had over 10% interest rates?
As a survivor of the Nixon administration I look forward and cringe at the leadership choices I have. GW warn’t so bad with the economy.
The 10 year I/O is also an option as I approach retirement and the stairs get to be a pain. But that means selling and moving although a single story would be nice on the bad and getting worse days!

Anybody know where I can do a buydown to 5% for a 30 YF?
My obsessive compulsive disorder is kicking in so don’t ask why!

[tugg49]

I’m getting ready to re-fi my 5 year fixed and look at a 6% or even a 5.5% 30YF as a great selling point if it’s an assumable loan. Who knows where we might be in 5 or ten years. Remember when we had over 10% interest rates?
As a survivor of the Nixon administration I look forward and cringe at the leadership choices I have. GW warn’t so bad with the economy.
The 10 year I/O is also an option as I approach retirement and the stairs get to be a pain. But that means selling and moving although a single story would be nice on the bad and getting worse days!

Anybody know where I can do a buydown to 5% for a 30 YF?
My obsessive compulsive disorder is kicking in so don’t ask why!

[tugg49]

I’m getting ready to re-fi my 5 year fixed and look at a 6% or even a 5.5% 30YF as a great selling point if it’s an assumable loan. Who knows where we might be in 5 or ten years. Remember when we had over 10% interest rates?
As a survivor of the Nixon administration I look forward and cringe at the leadership choices I have. GW warn’t so bad with the economy.
The 10 year I/O is also an option as I approach retirement and the stairs get to be a pain. But that means selling and moving although a single story would be nice on the bad and getting worse days!

Anybody know where I can do a buydown to 5% for a 30 YF?
My obsessive compulsive disorder is kicking in so don’t ask why!

[HLS]

With a buydown, I can offer 30 YR fixed @ 5% PITI.
Loan amount max is $417K
IF you qualify,
Here are the buydown options at the moment.
RATE % cost
5.625 .25
5.50 .75
5.375 1.50
5.25 2.25
5.125 3.25
5.00 4.00
Subject to change at anytime. There are closing costs to get these rates.

[HLS]

With a buydown, I can offer 30 YR fixed @ 5% PITI.
Loan amount max is $417K
IF you qualify,
Here are the buydown options at the moment.
RATE % cost
5.625 .25
5.50 .75
5.375 1.50
5.25 2.25
5.125 3.25
5.00 4.00
Subject to change at anytime. There are closing costs to get these rates.

[HLS]

With a buydown, I can offer 30 YR fixed @ 5% PITI.
Loan amount max is $417K
IF you qualify,
Here are the buydown options at the moment.
RATE % cost
5.625 .25
5.50 .75
5.375 1.50
5.25 2.25
5.125 3.25
5.00 4.00
Subject to change at anytime. There are closing costs to get these rates.

[HLS]

With a buydown, I can offer 30 YR fixed @ 5% PITI.
Loan amount max is $417K
IF you qualify,
Here are the buydown options at the moment.
RATE % cost
5.625 .25
5.50 .75
5.375 1.50
5.25 2.25
5.125 3.25
5.00 4.00
Subject to change at anytime. There are closing costs to get these rates.

[Author]

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