Dear smart and knowledgeable MMM real estate folks,
We have the famous Penfed 5/5 ARM, currently at 2.5%. In a few months it will hop up to 4.5% (maximum is 2% over the current index rate, which used to be LIBOR but may now be the 5-Year Treasury Constant Maturity Rate
https://fred.stlouisfed.org/series/DGS5 ). In 5.5 more years, it could go up to as much as 6.5%. Not sure if we will be in this house by the time that the highest rate rolls around; we would like to move within the same town but we are lucky to have flexibility. House values in our area will likely be steady or continue to rise.
Penfed is offering us a rate reset of 3.8125% for a nominal fee of $500. It amounts to paying a half year at this higher rate in return for another 5 years at the new rate rather than 4.5%. It would be a savings of over $10K on our jumbo loan.
Should we grab this offer now, or shop around? It looks like rates are going up over time but I was thinking we might be able to get a rate a few tenths of a percent lower if we check every day for a month. I am concerned that the offer will vanish if I spend too much time searching for a better deal (I've never refinanced before so there will be a learning curve and I'm not sure where to start.)
Thanks!