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Make an excel model with payoff schedules for each option.
Basic sumif for all payments till a date chosen, given target interest rates and upfront refinance costs.
To me the difference in savings isn’t worth taking the 7/1 arm. Rates are at historical levels, better to lock it in. You don’t know what 5 years down the line will be, you might stay who knows.
Going through the process now for a 15 year at 2.8%. Pretty excited!
SA1 - I used zillow mortgage. It asks you some questions and then allows you to see which lenders are charging what rates. I reached out to a few initially and then kept in touch. I called about 3 lenders and talked to them - both internet and known. I asked them not to run my credit until I applied but talked through my situation. They were able to quote me based on our discussion. This also allowed me to consider closing costs for each lender, based on the program they were charging. One day, I noticed the rates bounced down and called a lender I had already spoken to. He locked me in that night at 2.875%.
The big thing to consider is the break even time of closing costs vs. the new rate etc. As others have suggested, just run amortizations in excel tot see if it makes sense for you.
Also, considering we are in the BayArea, every basis point reduction helps due to the sizeable loan amount 😂
Completely depends on if you see yourself there beyond 7 years. My wife and I are starting the process for 7/1 at 2.5% because it’s our starter home and we will eventually move to a single family after stating a family
As low as interest rates are, will you really be saving much with the ARM?
When calculating your savings make sure the ARM doesn't have any higher fees or closing costs than the fixed rate as higher fees could erase your true savings
Consider your current payoff vs. the refinance and closing costs to the new rate. 15-20 year is better than 30 and the 5/1 ARM, who knows? I locked in 4-6 weeks ago when rates dipped below 3%. They’ve gone back up with the most recent rate cut so just watch them and do what makes sense for you.