What do you guys think interest rate will do for the next few years? If you were buying a house, would you go for an adjustable rate (around 4% right now) or lock in a 30 year fixed mortgage at an investor rate of 6.1%? The adjustable would use a 12 month average, with a cap of 10.35%. The adjustable would be a savings of $180 a month, at the moment.
I'd lock. It's only a matter of time before rates head significantly hgher and stay there for awhile. It may not happen in the next few months though, but it will likely happen within a year or two. The downside risk if you don't lock low is much greater than the upside now.
the most important question is - how long do you plan to live in the house? if this is the house you plan to live in the rest of your life, definately lock the rate...you'll probably never get a chance at a lower 30-year fixed rate.
however, if you plan on only living there for a few years, i'd go adjustable.
traditional thinking says over 7 years is the point where you should fix the rate.
however, if you plan on only living there for a few years, i'd go adjustable.
traditional thinking says over 7 years is the point where you should fix the rate.
We just refinanced our house with an adjustable rate about 5-6 months ago. Just like blue was saying, we plan to live there less than 7 years so it works out well for us.
It cost something like $1000 but it saved us around $200 a month. So we got are money back in 5-6 months.
Good Luck.
It cost something like $1000 but it saved us around $200 a month. So we got are money back in 5-6 months.
Good Luck.
