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**Halon** · 08-15-2013

Interest rates are at record lows. They have come up a little in the past few months but still are ridiculously low in the grand scheme of things. I'm not financial genius, but I don't know why anyone would get an ARM right now? We locked in at 3.625% for a 30yr on our house.

From the sounds of the one you are talking about, you'd be locked in at 3% for 5 years. Then after 5 years, the way I believe that cap % number is that is the max it's allowed to change every year. So worst case scenario you could end up at 5% at year 6, 7% at year 7, 9% at year 8 (you've tripled your interest rate at this point), etc. Will it change that max cap amount every year, probably not. But that's the thing with an ARM, you really have no idea and no control over what happens after the fixed period is over.

If you're OK with that, then sure I guess go for it. I know I personally won't go anywhere near an ARM.

Do you know what the highest rate the mortgage can ever reach over the life of the loan? Also, do you know what the margin percentage is?

08-15-2013	#2
Halon Pewp Champion Join Date: Nov 2003 Location: Blaine Drives: Teh Bean Posts: 12,309	Re: Refinance - ARM? Thoughts.... Interest rates are at record lows. They have come up a little in the past few months but still are ridiculously low in the grand scheme of things. I'm not financial genius, but I don't know why anyone would get an ARM right now? We locked in at 3.625% for a 30yr on our house. From the sounds of the one you are talking about, you'd be locked in at 3% for 5 years. Then after 5 years, the way I believe that cap % number is that is the max it's allowed to change every year. So worst case scenario you could end up at 5% at year 6, 7% at year 7, 9% at year 8 (you've tripled your interest rate at this point), etc. Will it change that max cap amount every year, probably not. But that's the thing with an ARM, you really have no idea and no control over what happens after the fixed period is over. If you're OK with that, then sure I guess go for it. I know I personally won't go anywhere near an ARM. Do you know what the highest rate the mortgage can ever reach over the life of the loan? Also, do you know what the margin percentage is? __________________ B-Man - FlexFuel Mafia 1991 TSi AWD E85 - BEP S362, DSMLink V2, Built 2.0L Idle Vid 628hp Graph 541hp Vid 10.93@137 Vid 1992 SC300 E85 - BW 84-75, Vlad Infinity, NA-T, 6spd Idle Vid 709hp Graph 709hp Vid 11.1@131 Vid 2006 Bayliner 195 - Carbed 5.0 Top Speed Test Last edited by Halon; 08-15-2013 at 04:34 PM..