Is a 7-1 ARM a terrible idea over 30yr fixed?

My wife and I are looking to move into a larger house (in California) as we start a family. We’re in our starter home now but found a home we really like.

We both have good credit and enough equity in our house for 80% LTV on our next home. Rates though our credit union are 4.875% on a 30yr fixed jumbo with 20% down. The loan officer also mentioned they are doing 7-1 ARM loans for 3.625% with 15% down. No points or origination fees on either.

All in with less down, the ARM comes out to almost $350 less per month than the 30yr but it brings with it the additional risk of having to refinance before 7 years is up. We plan on this being a forever home so it’s not like we would sell before 7 years either.

Just the word “adjustable rate mortgage” makes me shudder from the ‘07 housing bubble, but curious what you all think of the two options.

submitted by /u/elmigs07
[link] [comments]

My wife and I are looking to move into a larger house (in California) as we start a family. We’re in our starter home now but found a home we really like. We both have good credit and enough equity in our house for 80% LTV on our next home. Rates though our credit union are 4.875% on a 30yr fixed jumbo with 20% down. The loan officer also mentioned they are doing 7-1 ARM loans for 3.625% with 15% down. No points or origination fees on either. All in with less down, the ARM comes out to almost $350 less per month than the 30yr but it brings with it the additional risk of having to refinance before 7 years is up. We plan on this being a forever home so it’s not like we would sell before 7 years either. Just the word “adjustable rate mortgage” makes me shudder from the ‘07 housing bubble, but curious what you all think of the two options. submitted by /u/elmigs07 [link] [comments]

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