PenFed 5/5 ARM alternatives

Not a fan of the 5/1 or the 7/1? I went with a 10/1 which if you're planning to stay for ten years, assuming rates will rise is a great alternative to a 5/5. A little more expensive today but long term may get you back to the same place. I got 3.375% in a refi from Wells back in August, thinking that rate may be lower today...

call other banks. there are lots of products out there

Yeah I am considering a 7/1 or 5/1 at this point.

10/1 is a little long because I am almost certain I will not live in the apartment that long (it's possible I can HOLD it for that long, i.e. move out and rent it out, but definitely won't live in it that far out).

I see some 7/1 for 2.5-2.8% and 5/1 seems to be around the same.

If you will be out, then get an interest only?

My goal would be to minimize costs though, so I/O is not a good fit. I don't mind monthly payment, principal payment is just another form of forced savings.

The I/O would be great in this circumstance if you are looking at an ARM. You just have to be careful that if you only pay the interest each month, at the end of the period, you will still owe the full amount of the loan. The advantage is you can pay down when you want and when you want and every time you pay principal, the interest cost drops immediately.

Very few co-ops will approve I/O mortgages.

i got approved for a 2.75% 10/1 2/2/5 or a 3.625% 30y fixed- have a very high fico (>780). going with the 10/1 due to my time horizon being shorter.

if you have some degree of self-discipline, and the apt you are buying will allow, io is the best bet.
io's give you the option to pay down ea month, with a choice of effecting a shorter term (big interest cost saving) with same pmt amt, or same term with reduced pmt amt.

or you can pay interest only, if that fits your overall objective/liquidity and market performance of your apt.

And many coops do in fact accept io's, esp if you are putting down equity in excess of min req by coop. some boards are too dumb to see the value of this, but most have come around.