[jIMOh]

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Originally Posted by semtex House hunting is a long journey. Finally we are there. Now the question is ARM or 30 Fixed? In fact, ARM never came to my mind until this morning. When I talked with one MBS guy in our company, he said maybe I should consider ARM. He bot his house at 2001 and used 5/1 ARM. Here is our situation. We will put 15% down and have a piggy loan. We have one 15 months CD matured at this Dec, it is good to cover the small load, 5% part. I do some cash flow analysis. Assuming our current income, after max 401k and Roth(maybe could not do it, but I put 8k aside anyway), after the daily life expense, after all tax..., we could pay off the morgage in 7 years. So 7/1 or 5/1 ARM looks attractive since we will get a better rate? By the way, my wife and I, we have nice FICO, both >740. How you guys think?

If a 5/1 or 7/1 interest rate looks appealing (relative to 30 year) and you can overpay the mortgage to pay either ARM off in 7 years, then look at a 15 yr fixed situation as well.

You know the 5/1, 7/1 are the lengths of time the rate is adjusting (I had a 15/1 ARM which adjusted once every year for 5 years, then ammortized at year 6-15). Make sure you understand the loan provisions.

a 7/1 ARM does not mean loan is paid off in 7 years... you know this, correct?