Hi,
We could not find our dream home. We are buying a home that we are not
going to keep it more than 4-5 years. We need $200k loan. So, we are
thinking of 5/1 ARM with one point to keep the interest rate as low as
possible. Our Mortgage broker's rate is %4.25 based on 30 years. But
he is advising to go for the higher rate but based on 40 years which
means lower monthly payments. BTW, we are just paying the %20 down
payment but have some cash to buy more points to lower the rate but
the recovery time would be too long.
We would like to hear your suggestions. What's the catch here?
Thanks,
Al

Al wrote:

We would like to hear your suggestions. What's the catch here?

For the different loans compare total amounts paid over that time
(including loan costs) and how much equity you build and not the
interest rates.

In article ,
Al wrote:

We could not find our dream home. We are buying a home that we are not
going to keep it more than 4-5 years. We need $200k loan. So, we are
thinking of 5/1 ARM with one point to keep the interest rate as low as
possible.


One point is costing you about $2000. How much are you saving by paying it?
I would think twice about paying any points on a house I don't intend to
live in long. What is the point buying you?


Dimitri