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Is there a 10/1 arm available at low cost or even no cost?

I plan to stay in my house for 10 more years. I currently have a 127k balance and 9 years remaining on a 10 year loan @ 2.75%. I would like to max out my thrift savings plan at 15% and contribute 5k to a Roth IRA and 5k in catch up contributions ( age 52 ). My current payment is 1750. and in order to max out the investments mentioned, I would have to refi to have that investment cash. I would then pay off the mortgage in ten years with the earnings. Does this sound like a feasible plan?
  • October 19 2013 - US
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Answers (5)

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P ~ I is about 1325.00. Principal is a little over 1,000. Interest is near 300. I am just trying to invest more in the Roth area. Would like to invest about 10,000 more per year.
  • October 19 2013
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I assume $1,750 is total payment.  What is your P & I payment, and what P & I are you trying to get to?

  • October 19 2013
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The 15% is pre tax savings of my gross income. I feel that with the availability of that and the Roth and the catch up contribution opportunities that I am missing out on investments by having most of my $ going toward the mortgage. It seems that I should be able to out perform even the 3 to 4% in investments. Am I not seeing this clearly?
  • October 19 2013
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As noted below, the rate on a 10/1 ARM will most likely be in the 4% range as this product is amortized over a 30 year term.  If you are looking to take cashout for your investements, you may still want to consider a 10 year term mortgage which should be in the 3% range.  Otherwise if you need to lower your monthly mortgage payment you could look at a 15, 20, or 30 year fixed term although those rates would range from 3% up to 4% or higher.  You can always request reduced or no closing costs but that will just typically result in a higher interest rate paid over the life of the loan.

  • October 19 2013
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Dumping a 2.75% rate for anything currently seems like a poor choice. I'll wait to see what the lenders advise but it seems to me that you should not do that since there will be a cost to refi plus the rates are in the 4% area with no points. You lost me on the 15% something, if you have something paying 15% I'll contribute to it.
  • October 19 2013
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