Saleen367

Off Topic, sorry.

Recently separated and am looking at houses/financing.

I wanted to go with a 15-20 term but that limits my house choices with a single income.

There must be some finance experts out there that can give me an opinion on both ARM's and Interest Only ARM's.

The interest only ARM would really free up my options for housing. I could easily live in a nice neighborhood with a decent yard, garage, etc. Or have enough for a boat in the future.

If I go 15-20 yr fixed, I am limiting myself to around $160000 which doesn't buy much here.

Seems the housing market is starting to slow down and level out. Would I be wise to stay with a fixed rate 30 yr term in hopes of moving on or is the ARM an option.

BTW, I'm 43 and would like to retire at 60.

Dave1972

Saleen,

I have a buddy here in Wisconsin who has been in the mortgage lending business for several years. Feel free to contact him and he can guide you in the right direction. His email is: [email protected].

Good luck with your decision...interest only sounds great and looks great on paper, but the way the market is slowing down perhaps that might not be a good idea unless you know that the property value will increase or that you will sell it for a profit within a few years. It's a tough time to make that decision right now!!!

Von Bongo

Depends on how long you want to live there. There are 1/1, 3/1, 5/1, 7/1, 10/1 and 15/1 ARMs available that are amortized over 30 years as well as similar balloon loans.

If this is your last house then a fully amortized 30 fixed rate loan gives the most protection long term against rising rates. If you think you will live there for a few years and move on or up then go for an arm that is a couple of years longer than you expect to be there.

Interest only is OK and can be had on a 30 year loan that has either 10 yers interest only or 15 years interest only followed by the remaining term as thought it were a 20 or 15 year loan respectivly. You can also get interest only arms, again with the rate risk if you plan on staying a long time and not paying off early.

Saleen367

Dave, I have talked with Darrell, but I think he may be busy or something. Haven't heard back for a few days.

Von Bongo ... you are stating my biggest worry.
Getting caught in an ARM with a cap of 2/2/6 or something to that effect would kill me if interest rates start to go up dramatically.
I got an ARM on my 1st house and it was a God send back in 91. But with the economy as it is and fuel prices rising, I'm just not sure.

Could the economy really withstand the rates rising 4-5% with the gas prices as they are? Seems that the housing market is about the only thing feeding the economy right now.

Anyhow, I just hate the idea of the 30/fixed if I should ever meet anyone else in a few years and they have a home. I now have little or no equity at the time of sale. Of course with an interest only loan, that would be worse, but only slightly.

I know, I'm talking in circles ...

Ports

If you still need help:

Paul Holm
Prime Mortgage
Minnetonka MN
www.prime-mortgage.com
952-540-6111

(its not me its my old man)

Dave1972

Saleen,
Darrell had a family emergency/illness to tend to. I just got an email from him this morning. Definitely give him a holler' as he's got some darned good products (from what I know anyway).

Dave

Caincando1

The market here is slowing down. It's a buyers market. Mandy and I are finding this out. It good and bad for us. Oh course I want top dollar for our house so its tough selling. But once we do sell we are going to get a little more for our money when we buy.

Best of luck. We will talk this weekend.

Saleen367

Darrell gave me a shout on the cell. I had no idea about his Grandmother.

I'm sure he will hook me up with something that will work.

Dave1972

Glad to hear he got back in touch with you...let us know what you decide!!