30yr Fix or ARM

Jumbo meaning $800k or more like $1.5-$2mln? Isn't there a 30yr hybrid io/fix? what kind of rates are you seeing on those? Also what sort of down payment - 30%?

How long are you planning on keeping the apt? What's the likelihood of that plan changing, and what would instigate a change?

25% down, under 1mln mortgage- I'm not sure how long the expected term in the apt is, but refi can always occur later, correct?

and also what is the cap? all depends on your situation.. i am actually going to refi into a 5/1 at 2.5 no pts and they are paying my closing costs. from a 4.375 fixed... current bal 580k ltv is appx 50%..

The 5/1 rates seem high to me.

I took a 30 yr jumbo even though I will not own the apt that long because I figured the rates will never be this low again. And who knows what the market will be like when I am ready to sell. So, if I have trouble selling when I am ready and rates are significantly higher, I might consider holding the mortgage in a sale. But not before I discuss it thoroughly with Inonada.

The only way an arm makes sense is if you have a firm idea of selling and the periodic caps keep the rate in the safety zone, and attractive relative to the fixed.

I feel really really old now.

Fixed unless you have a job with the potential for significant additional prinicpal payments before you have to refi or you're d-mned sure you're going to be out in five years.

ali r.
DG Neary Realty

nyc10023
about 3 hours ago The 5/1 rates seem high to me.

2.75% 5/1ARM 0 point is HIGH??!?!?!

I was looking at some numbers...

Hypothetical 800k loan , monthlies are 3935 on a 30yr (4.25%) and 3427 on a 7/1 (3.125%).

Over the course of 7 years you'll save $43k in the 7/1 and paid down an extra $18k in principal. You'll have paid 43+18 = 61 less in interest, so your cash savings is approximate $22k due to the tax deduction. So net you are 40k better.

Let's say you max reset in year 8 to 5.125% - due to lower principal your monthly will be 4162, so you basically are out just $3k for the year vs being in a fixed. Even in year 9 if you reset to 7.125% your monthly is still only 5k, so another 12k or so. So even with a 9 year horizon you have about 10k of cash savings, plus 20k or of extra principal paid down. What's the chance you'll still be in your apartment in 9 years?

Is it a co-op or a condo? A co-op board will be much stricter on your financials if you have an ARM.

how can a coop board be more strict with an ARM? What happens if you qualify within the requirements of pct of gross income with a 30yr fix rate pre qualification letter, but want to go for an ARM for the savings of cash up front?

A board prefers to deal with fixed costs when evaluating a purchaser's financials. So if the mortgage is not fixed, we expect the purchaser to be able to pay it off if the rate becomes too high. We don't allow refinancing except to lower rates - so the loan amount is not allowed to go up in any refinancing. The ARM purchasers we see seem to be taking the mortgage for the deduction rather than financing the purchase.

My point was that a co-op board prefers specifics rather than flexibility - so if it is a co-op it is wise to consider the type of mortgage as it could negatively impact your package