I'm trying to decide between loan options for a jumbo loan. The loan value is ~$840k. I've received (what I think) is a pretty solid set of rates from my lender.
The rates are:
- 30yr fixed: 3.750% w/ neg 0.5pts – $3890/mo
- 10/1 ARM: 3.250% w/ 0pts – $3656/mo
- 7/1 ARM: 3.125% w/ neg 0.6pts – $3598/mo
- 5/1 ARM: 2.875% w/ neg 0.25pts – $3485/mo
Is anyone else currently making this decision and leaning towards an ARM in this market? I know rates are super low… but looks like they've been declining fairly steadily since 1981?
So, that would say that going with an ARM was probably "the better choice" for each of the last 36 years? But for some reason the majority of buyers (I think I saw one article that said 90%) are still buying fixed mortgages? Do most people really think it will reverse trend and all of a sudden be worse? Is that expectation of a sudden trend reversal (which would've been incorrect for the last ~40yrs) worth the guaranteed loss of $5k per year?
(Adding Colorado to the title, but this is really applicable anywhere…)
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