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-   -   I got some great news last week.... (http://www.early-retirement.org/forums/f28/i-got-some-great-news-last-week-77391.html)

LRDave 05-25-2015 08:35 AM

I got some great news last week....
 
My Penfed 5/5 ARM adjusted from 2.5% to only 2.625%. I assumed back when I got the 2.5% rate that it would adjust to the max for the next 5-year period. I had it budgeted that way and honestly forgot about it (which is silly).

We should be selling this suburban boat anchor within the next adjustment period.

athena53 05-25-2015 09:14 AM

Always great when the "adjustable" part works in your favor! My first husband bought a condo in 1982 when interest rates were sky-high. His credit was bad, too, which didn't help. He got an ARM at 16.5%. It adjusted annually and by the time he sold it in 1985 the rate had adjusted down to 12.5%. I forget what the market rates were but they were definitely lower. I bet the bank was unhappy to see it paid off.

MooreBonds 05-25-2015 09:19 AM

Quote:

Originally Posted by LRDave (Post 1596887)
My Penfed 5/5 ARM adjusted from 2.5% to only 2.625%. I assumed back when I got the 2.5% rate that it would adjust to the max for the next 5-year period. I had it budgeted that way and honestly forgot about it (which is silly).

We should be selling this suburban boat anchor within the next adjustment period.

I had re-fied into the PenFed 5/5 ARM product back in 2011 or so, when it was (I think) 3.375%. I have several long-term options, and there is only a smaller chance that I'll be living in this exact house long-term (will likely either move or tear down and rebuild). So to avoid rolling the dice with the 5 year reset (since I knew rates just had to be higher 5 years later! :rolleyes: ), I refied a year later into their 1.99% 5 year Home Equity loan.

Good to hear that your reset was miniscule! Enjoy the next 5 years! But not silly at all on assuming rates would max-out, since that's what I had initially assumed (since the max rate increase was, I think, 2% increase, to 5.375%).

braumeister 05-25-2015 01:28 PM

I just got a new PenFed 5/5 ARM last month, also 2.5%.
There's no chance I won't pay it off before it resets, since it's just a bridge loan until we sell the old house, but I was really happy to get it. The other thing that surprised me was that when I started the application, it specified a half point, yet when the transaction was completed, it was only a quarter of a point.

There are still a lot of things about PenFed that are hard to beat!


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