Mortgage Blog

Yesterday, I locked a rate of 3.25% for 5/1ARM
for the rental property with impound account
by paying the cost of around $3000. This is not
bad for him since he saved $330 per month
and he can payoff the cost around 9 month.

And because of the maximum rate for this loan
is 8.25%. For for the next 10 years, his average
rate can not be over 5.75%(3.25/2+8.25%/2).
This is not bad compared to 30 yr fixed, and plus
the balance is lower and the rate could not be
around 8.25% for all the 2nd 5 years.

And today, someone asked me where the ARM rate
go? I indeed predicted ARM will go lower,
and most of the clients got those low rates.
But what's the bottom line? The lowest rate
is 2.25%, which most of the lenders will not
make money. So we all know, which rate we
will lock, right?