Hi all,
I have a 5/5 mortgage through Penfed. The current rate (2.5%) expires April 2019; balance is $350k. The three main options I'm considering are:
1. Sign up for Penfed's rate reset program today. For $250, I can lock in their current 5 yr ARM rate minus 0.0625%. (For today, that would be 3.9375%.) Downside is the new rate is effective from the date I sign up for it, so I lose the remaining 7 months at 2.5%.
2. Wait until closer to my reset date and then sign up for the rate reset program. This gives me a few more months at 2.5%, but leaves me open to rising interest rates until the reset. (This option still has the 0.0625% discount.)
3. Refi into a 30 year fixed with a different lender. Best rate I can find is 4.25%, fees would be around $3.5k (mostly title and county recording fees).
Other quick relevant info: I think we plan to stay here at least 15 years (but who knows), and if the rate jumps too much in another 5 yrs on the ARM we'd be in a position to pay it off, although it would use up most of our taxable-account assets.
I'm leaning towards option 2 right now - I'm generally a fan of keeping a low rate as long as possible - but am interested to hear different perspectives. Thanks!