How low can we go? 30 yr fixed at 3.75% with no fees...

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thatOSguy said:
So after sleeping on this and pencil-fucking it a bit, it's an interesting mixed bag.

Adjusted for tax savings on a monthly basis, the 5/1 isn't a ton cheaper than we're paying now -- just a couple hundred bucks or so.

But after 5 years, making the same payment as we do today (which already has additional principal reduction), our mortgage balance would be ~$60k lower with the 5/1 ARM vs our 4% 30 year fixed. This is offset by ~$4500 higher tax liability over the same term.
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Doesn't the presume the same interest in 5 years?  Don't you need to factor in some rise in the rate in 5 years?
 
Irvinecommuter said:
thatOSguy said:
So after sleeping on this and pencil-fucking it a bit, it's an interesting mixed bag.

Adjusted for tax savings on a monthly basis, the 5/1 isn't a ton cheaper than we're paying now -- just a couple hundred bucks or so.

But after 5 years, making the same payment as we do today (which already has additional principal reduction), our mortgage balance would be ~$60k lower with the 5/1 ARM vs our 4% 30 year fixed. This is offset by ~$4500 higher tax liability over the same term.
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Doesn't the presume the same interest in 5 years?  Don't you need to factor in some rise in the rate in 5 years?
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If the rate adjusted today on an ARM loan, the rate would be 2.875%.
 
qwerty said:
most arms use the 1 year libor as the base rate and add 2.0 to 2.5% to the rate.

the libor this week is .55%
http://www.bankrate.com/rates/interest-rates/1-year-libor.aspx
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All the loans I've done and seen do 1-year LIBOR plus 2.25% except for one.  I have an old Bank of America loan that I got when I worked for them where the loan has a 2% margin (employee discount) to LIBOR.  The bank takes the 1-year LIBOR rate approx. 45 days prior to the anniversary date and rounds up to the next 1/8% when the rate is re-set and the loan is re-amortized. 

I like to use the following site to track where LIBOR rates are at (you can also pull up a 3-year chart too): http://www.erate.com/Libor.htm
 
I should be closing this week, pretty fast considering it was a 45 day lock.

Nice to see you back from sabbatical OS. 

Refi closing party at Rita's Ice!
 
So how much are you guys saving a month compared to your previous loans?  I'm waiting for 2.5% with no fees before I pull the trigger (since I'm at 2.75% as we speak). 
 
USCTrojanCPA said:
So how much are you guys saving a month compared to your previous loans?  I'm waiting for 2.5% with no fees before I pull the trigger (since I'm at 2.75% as we speak).
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Saved about $200 and extended my term another 5 years  ;D
 
#FARM said:
ps9 said:
I should be closing this week, pretty fast considering it was a 45 day lock.

Nice to see you back from sabbatical OS. 

Refi closing party at Rita's Ice!
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Was Rita's Ice any good?
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i went to ritas ice on friday for the first time. sampled their custard, nothing special. i did try some italian ice, the starburst strawberry and that was very good.
 
ive been holding out for 2.5% but just emailed the loan person that i would do 2.75% with no closing costs. it would save me 300 net per month.
 
qwerty said:
#FARM said:
ps9 said:
I should be closing this week, pretty fast considering it was a 45 day lock.

Nice to see you back from sabbatical OS. 

Refi closing party at Rita's Ice!
Click to expand...

Was Rita's Ice any good?
Click to expand...

i went to ritas ice on friday for the first time. sampled their custard, nothing special. i did try some italian ice, the starburst strawberry and that was very good.
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The cherry that I got last week was better.  I dropped by offer my open house on Saturday and got the strawberry ice too since they didn't have the cherry...not bad but I liked the cherry better.
 
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