Here’s the inside scoop…None of my clients are paying 7% interest on their mortgages right now. They are almost unanimously using 5/1 Adjustable rate mortgages, which yesterday were locking at 5.5%. That means you pay 5.5% for 5 Years, then after that the rate will adjust up (or down) once per year for the remainder of the loan.
Why would I want to do that Rob??? GREAT QUESTION – any good lender I’ve talked to says they believe the rates on 30 year fixed mortgages will be back in the 5% range on fixed rate mortgages sometime in the next 12-36 months. At which time you can refinance and enjoy the benefits of a a low interest 30 year fixed mortgage.
Everyone’s situation is different and a 5/1 ARM may not be the right move for you…but the point remains the same, you don’t have to pay 7% interest if you don’t feel like it.
Just my two cents.
