Would an FHA 5/1 30 year 4.5 % ARM be a good refinance choice coming from a 30 year fixed FHA 6.5%?

Top incoming search terms for this post

One Response to “Would an FHA 5/1 30 year 4.5 % ARM be a good refinance choice coming from a 30 year fixed FHA 6.5%?”

1. Michael T on: 21 July 2009 at 3:10 am

   No one can answer that since we can’t foresee the future. It depends on the amount of risk that you are willing to take.

   For example if you will be paying 2.25% over 1 year libor when it adjusts in 5 years and libor was the same as 2006, then you will be paying about 8% interest or if it is like 2000, you may be paying 9%-10% interest (if it is allowed to adjust that far).

   But, if it remains similar to what it is today or during 2002-2004, you will be paying between 4%-5% interest when it adjusts.

   http://www.moneycafe.com/library/libor.htm

   Personally I don’t like any sort of ARM or even an interest only loan.