Author Topic: Interest Only vs ARM vs 30 year Fixed?  (Read 567 times)

Kash101

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Interest Only vs ARM vs 30 year Fixed?
« on: August 23, 2018, 11:12:57 AM »
HI All,

I am in the process of selling my current home ( on a 7/1 ARM at 3.25% ) and downsizing in both square footage and cost and comparing loan options.

Thoughts on the

 IO ( with a lower monthly payment but potential balloon / increased payment att he end of the term )

ARM ( similar but with payment to principal and interest )

30 year fixed ( higher payment but more secure and less psychological stress )


My goal regardless is today it off in 10 years, making large " chunk " payments as I can.

I am also putting 50% down.

Other factors, we are having a baby ( yay! ) and will be in perfect location for schools ( all rated 10/10 ) all the way through high school, so don't need to move in the bear future. Other intangibles important to us are there as well.

What are your thoughts?

Thank You





RWD

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Re: Interest Only vs ARM vs 30 year Fixed?
« Reply #1 on: August 23, 2018, 11:25:08 AM »
How long do you intend to stay in the new home?

You didn't give exact interest rates, but you should probably not accelerate payoff of the mortgage. A fixed term mortgage may be best suited for this strategy.

If you're going to ignore the above and pay it off quickly then you should go with the lowest interest rate you can get.

Kash101

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Re: Interest Only vs ARM vs 30 year Fixed?
« Reply #2 on: August 24, 2018, 12:32:18 PM »
plan on staying for the indefinite future.....

Dicey

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Re: Interest Only vs ARM vs 30 year Fixed?
« Reply #3 on: August 28, 2018, 12:21:23 AM »
Easy one. For a forever home, put 20% down and get a 30 year fixed mortgage. Invest the difference and you'll get to FIRE faster. Better to enjoy more time with your family.