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kotovma

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Keep refinancing after your ARM period expires?

Answer

Again, I'm not planning on keeping this loan for all 30 years. I want to save money in the short term and use it to pay off more principal than I would otherwise. I'm pretty confident in being able to refinance a few years down the road based on the acceptable loan to value ranges...

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Keep refinancing after your ARM period expires?

Answer

Thanks for the replies, guys. The particular 7/1 ARM I'm looking at has a fixed rate for 84 months, so I don't have to worry about not being able to afford the payments for at least those 7 years. The way I see it is that I can refinance then if rates jump to unacceptable levels. The house value though is a good point. So what is an "acceptable" range of loan to house value necessary to qualify for a loan? I realize it may not be black and white, but I'm just curious for a ball park figure.

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Keep refinancing after your ARM period expires?

I am considering taking out a 7/1 ARM loan over a 30 yr fixed loan for a $130K mortgage. My plan is to save on the mortgage payment each month and use that money each month directly towards principal. I guess this is a good place to ask: by paying more than my required payment - does that money go towards P or P+I?By my calculations, by the end of 7 years, I would have paid $9K more towards principal and spent around $7K less on interest by going with ARM over 30 yr fixed.This is where I have a general question about ARM: is there anything to prevent me from refinancing when the ARM period is over (7 years) and taking out another ARM (or even fixed) mortgage? That way I took advantage of low interest and paid more towards principal on my mortgage. I don't know much about this, but what is there to stop me from taking out ARMs continuously? First time home buyer here, so don't judge :)

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