Woop! Woop!

[brewer12345]

Pen Fed is now at 4% for their 5/5 ARM. Gonna git me one o them.

 

[artist59]

Wells Fargo

Have you looked on wellsfargo.com? Their rates are 3.875 for a 5 year arm

 

[friar1610]

On the lending (vs. borrowing) side, I noticed that for some CDs PenFed has fallen behind NFCU on interest rates. For a while, PenFed was paying higher rates. And USAA FSB is looking pretty good right now on 5 year CDs, relatively speaking.

 

[Gone4Good]

Pen Fed is now at 4% for their 5/5 ARM. Gonna git me one o them.

How did I wake up in 2006?

 

[brewer12345]

Have you looked on wellsfargo.com? Their rates are 3.875 for a 5 year arm

But that product is a 5/1 ARM that can adjust 5% upwards at the reset. Pen Fed's loan is a 5/5 that can only go up by 2% at the reset.

 

[brewer12345]

How did I wake up in 2006?

Wish it really were. That way I would know to short the crap out of everything next year...

 

[brewer12345]

Well, that was (relatively) painless. No doubt the fun starts with the appraisal, although the ~40% LTV, assets in excess of the loan amount, and extremely secure employer should make that a moot point.

edit: Oh yeah, and for the record, I elected to pay .25 point and get 3.875% for my first 5 years.

 

[CCdaCE]

What's the max. readjustment? For instance, can it go to 8% after 10 years? Or, 10% after 15 years?

-CC

 

[FUEGO]

I'm seeing 4.5% today on the 5/5 arms at penfed. Did the rates go back up that quick?

 

[CCdaCE]

Apparently they did. I saw penfed's 4.0% with my own eyes yesterday by random, dumb luck. Then I noticed this thread, and started to think about it. But, alas, it's "gone". ...if it ever was.

-CC

 

[brewer12345]

That one was like a hummingbird: here and gone. Very glad I jumped on it, though.

In case it comes back for another brief spell, the max adjust every 5 years is 2% and the cum max adjust is 5%.

 

[audreyh1]

Wow Brewer - I am so impressed. Striking while the iron is hot! Congrats on the execution.

Audrey

 

[brewer12345]

Wow Brewer - I am so impressed. Striking while the iron is hot! Congrats on the execution.

Audrey

Thanks, but not complete yet. Still have to close, although with a 90 day lock and very easily passing the qualifications I imagine it will be more annoyance than uncertainty.

 

[saluki9]

Just locked on a 30 year fixed at 4.875 with no costs. Rates sure are getting attractive again.

 

[ProspectiveBum]

Pen Fed is now at 4% for their 5/5 ARM. Gonna git me one o them.

Congrats on hitting what looks like the low water mark. Just curious on the rationale behind picking an ARM rather than a fixed-rate loan? With long-term rates being so low, it seems that that would be a safer pick long-term. I'm not criticizing the choice, just looking for some education; I may be looking to refi soon, myself.

 

[saluki9]

Congrats on hitting what looks like the low water mark. Just curious on the rationale behind picking an ARM rather than a fixed-rate loan? With long-term rates being so low, it seems that that would be a safer pick long-term. I'm not criticizing the choice, just looking for some education; I may be looking to refi soon, myself.

IIRC Brewer has a fairly reasonable mortgage balance and was on a short payoff schedule.

In a situation like that you're best to hit the lowest rate you can for 5-7 years. By the time that rate lock comes up you will have paid down enough principal that the rate isn't going to matter all that much.

 

[brewer12345]

Congrats on hitting what looks like the low water mark. Just curious on the rationale behind picking an ARM rather than a fixed-rate loan? With long-term rates being so low, it seems that that would be a safer pick long-term. I'm not criticizing the choice, just looking for some education; I may be looking to refi soon, myself.

Saluki had it. I am 8.75 years away from killing my originally 15 year mortgage. Even in the worst possible scenario (rate adjusts upward to the max at the end of the initial 5 years) I still come out substantially ahead on the new mortgage. In all likelihood, the loan will be paid off entirely shortly after the scheduled reset. I also have more liquid assets than the mortgage balance.

If I were not on such a short time scale, I would not have picked an ARM. This product is also somewhat unique in that when the reset happens the rate will be fixed for another 5 years. That is a lot less risky than having the rate eligible to readjust every year after the initial 5years. The worst possible outcome over a 10 year span is a lot better for a 5/5 than a 5/1.