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mortgage refinance
Old 05-18-2018, 03:04 PM   #1
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mortgage refinance

The timing isnít great, but it looks like I might need to refinance my mortgage.

Iím debating between two options: a 5/5 ARM or a 30 year fixed mortgage. Letís say thereís about a 30% chance Iíd sell within the next 10 years.

The 5/5 ARM is at 4.25 and the 30 year at 4.75. Assume the closing costs are about the same.

Which would you choose?

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Old 05-18-2018, 03:48 PM   #2
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Fixed- rates are going nowhere but up. If I'm wrong, you can refinance later.
I'd look at 15 or 20 yr.

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Old 05-20-2018, 04:00 AM   #3
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Iíd take the 4.75% 30 year fixed. Still a low rate by historical standards and the 0.5% difference for the ARM is not enough of an incentive to take the risk. Also, if there is only a 30% chance youíll sell in the next 10 years, no reason not to lock in a low-ish rate.

This answer assumes you think you can earn more than 4.75% on your investments; if not, you could consider paying off part of all of your mortgage.
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Old 05-20-2018, 05:14 AM   #4
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Fixed- rates are going nowhere but up. If I'm wrong, you can refinance later.
I'd look at 15 or 20 yr.
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