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5/1 vs 30 year fixed

My wife and I are buying our first home. We are buying a "starter home", we want to be in this house for less than 5 years. We are putting 20% down. Should I take a 5/1 loan since we do not plan on staying here long term?
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April 17 2013 - Evansville
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are you 100% certain you will be selling home within 5 years ? if so - yes
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April 17 2013
Go for a 30 year all the way. The difference between the rates are minimal in terms of changing your plans in 5 years. 30 year fixed gives you the ability to say "We're Staying" vs. "Oh my, we're staying and now our rate is adjusting!" Current rates are so close to free, go safe and conservative with the 30 year. No one can 100% predict the future.
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April 17 2013
Look at 7/1 & 10/1 ARM options as well. If all are very close, it is probably the wisest decision to go with the 30 year fixed.
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April 18 2013
I would encourage you to be open to all possiblities. Look at different loan programs and think about each senerio.
I have a few clients who go from ARM to ARM to ARM every 3-5 years.
Ask your loan officer what they believe would be the best solution for your specific needs.
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April 18 2013
This is the classic risk/reward debate.  If the difference in payment on the 5/1 will have a significant impact on your lives, it's certainly worth a look. But if you are just trying to get the best deal, I will simply say, "Plans Change, but the rate on a 30 year fixed won't."
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April 18 2013
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This is exactly the same situation I am in. Looking at all the options, I see that these two are the one that I should chose one from

1: 10/1 arm since the interest rate is too low on this one. 
2: 30 year fixed.

Which one to shoot for, I am not able to figure out.
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April 22 2013
 
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5/1 vs 30 year fixed
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Latest reply by mayank_gupta123
April 22 2013 | 6 answers
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