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What Mortgage type choose in current market

We are first time home buyer. I have a 760+ credit score and we are putting 15 % down. The mortgage broker is offering 
30 yrs fixed @ 4.5 %
7 yrs ARM @ 3.5 % and 
5 Yrs ARM @ 3.25 %
With Interest rates likely to go up in near future (predictions are by next week), What should I pick..suggestions greatly appreciated.
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September 13 2013 - US
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What are the fees associated with the 4.5% and what are the fees that the broker is charging you?  It is tough to tell what interest rates will be next week and in this environment that we are in it is risky to float any loan at the last minute. 
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September 13 2013
I would not choose an ARM when fixed rates are this low unless you are sure you won't be in the house more than 7 years. But you have to be sure. Then I would pick a 7 yr arm -- maybe.
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September 13 2013
Well first, you should ask yourselves-How long do we intend to stay in the subject property? If longer than 7 years-go with 30 year fixed or look into a 15 year fixed. 
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September 13 2013
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We plan to stay in this home long term..no less than 15 years at least.
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September 13 2013
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There are no closing costs associated, all i m paying is appraisers cost an title cost..no closing points.. with these rates....15 years fixed mortgage is too much for us to handle..
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September 13 2013
It depends on the time you anticipate staying in your home.  In my area most owners stay from 5 to 7 years.  The biggest price drop is from 30 to the 7 year arm, so the ARM will be a better choice for the most average buyers.
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September 13 2013
Personal opinion, 30 year fixed at the higher rate because you'll be in the home 15+ years. PMI will drop off soon thus lowering your payment. Rates will likely NOT be lower in 5 or 7 years and you could really get stung if you try to refi then to get out of the ARM.
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September 13 2013
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A ton of thanks to you all for making me come closer to the decision. I did chose 30 yr fixed w/ PMI and with a 30 day lock the rates got even slightly better..also offered a credit back...cheers, you guys rock.
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September 13 2013
I would say which ever product bebefits you the most. Typically the average home owner will refinance their mortgage every 4-5 years. Obviously with the ARM products you need to do them before the rate changes but you will end up saving the most monthly. I agree with all that was suggested below. Fixed is the safer bet and also keep in mind the rates are still low, consumers have just been spoiled the last few years becasue the rates were at all time lows.

Good luck!
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September 13 2013
Just saw you posted your decision as I was typing haha! Congrats and best wishes!
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September 13 2013
You have to understand that choosing an ARM can always be risky. Yes, you do save money is the short-run but then your interest rates can change after that. I would always recommend a fixed over an ARM because at a fixed rate you will know what you will be getting for the next years and with an ARM you don't. Then again, this can all depend on you and your style.

Well I hope this helps! If you have any further questions or if you need a loan, feel free to contact me.

Good Luck!
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September 13 2013
 
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