Is a 5/1 ARM worth it with fixed rates so close?

Hi,

I%26#039;m currently shopping for my first mortgage and am wondering if theres any advantage in doing a 5/1 ARM when fixed rates are so close. My bank quoted me 6.125% on a 5/1 ARM with 3% down and 6% on a 30 yr. fixed with 20% down. I plan on staying in the house for no more than 5 yrs.

I do have funds for 20% down, but wouldn%26#039;t mind holding on to a few bucks for safe keeping. Is there a clear advantage to either of these options?

Thanks!

Is a 5/1 ARM worth it with fixed rates so close?child tax credit

do not get the ARM....you can get a 6.125% on a 30yr fixed with 5% down. FHA is 3% down...and that%26#039;s about 6.625%......another thing is how many points are you paying

Is a 5/1 ARM worth it with fixed rates so close? loan

Don%26#039;t fk up your future - never, never, never get an ARM. Especially with rates so low. Get the best terms on a traditional mortgage that you can, but don%26#039;t ever get an ARM.

@Robert W - when it rains it pours - eh comrade?|||Skip the ARM, you could loose everything. What do you think people are crying about?|||I say go with the 30. Put 10% down not 20. Even 5% down gets you conforming rates. You can still get 6% with a point. 6.25% with no points. Yes there will be PMI. If that is a concern, ask about a piggyback.

You will sleep better with a 30 and 5 years goes by in a flash!

BTW, What is the loan size?|||Why is your lender asking you to put 20% down on a fixed. There are so many other options out there. You don%26#039;t have to put that much down to get a fixed. Especially if you are a first-time homebuyer. I would do somemore research before taking the step that changes your life forever!|||Go ahead get the ARM . i%26#039;d like to meet u.

(fixed rate only)|||If you are certain that you will not outstay the ARM then it is a beter deal, sure.

But it is a gamble. What if something happens and you can%26#039;t sell?

Not worth it to me, personally.

Can anyone explain what the Federal Reserve has to do with interest rates?

I know they set them. But how do those rates affect rates say at a local bank.

Can anyone explain what the Federal Reserve has to do with interest rates?mortgage lenders

One of the rates the Federal Reserve sets is the Federal Funds Rate - the interest rate banks charge when they loan money to other banks.

Another rate the Fed sets is the Discount Rate, which is the interest rate the Fed charges when it loans money to banks.

When banks have to pay more interest on the money they borrow, they raise the interest rates they charge other borrowers.

Can anyone explain what the Federal Reserve has to do with interest rates?

loan

Federal Reserve Bank is run by the USA Goverment! And the local banks has to follow orders!|||Basically, the Reserve loans money out to the banks at the %26#039;discount rate.%26#039; In order to make money borrowing from the Fed, the banks need to loan it back out at a higher interest rate. The difference between the borrowing rate and the lending rate represents most of the bank%26#039;s profits.

The rest comes from checking fees. :)|||The Federal Reserve sets Interest Rates which then dictates the cost of money at the banking level. The Federal Reserve is absolutely NOT run by the U.S. Government.|||55 years ago - the Federal Reserve board (%26#039;FED%26#039;) became the watch dog for the US gov`t in servicing the interest rates ( and the debt ) of the Gov`t ( US Treasury ) that is charging preferred US banks.

( See : The Treasury accord of 1951 )

Since the banks are paying the LEAST interest rates on what they BORROW - everybody else pays a bit higher ( So the banks make a living too.)

So in essence - when the FOMC ( The FED%26#039;s comittee that deciedes those rates ) change the interest rates - it affects EVERYBODY !|||While the marketplace determines interest rates, the Federal Reserve exerts strong influences in several ways:

(1) The FOMC (Fed Open Market Committee) manages %26#039;supply and demand%26#039; for US Treasury securities by holding or releasing securities in the portfolios that they control; by increasing or decreasing supply, their actions can drive prices down and rates up (by increasing supply ... or the reverse by decreasing supply).

(2) Fed sets the target rate for short term borrowing by banks (the Fed Funds rate)

(3) Fed determines reserve requirements imposed on bank deposits, which allows them to impact the amount of money in circulation ... managing the %26#039;supply and demand%26#039; for liquidity which can impact both interest rates and consumer%26amp;wholesale prices.

Refinancing help...what is a better long term option?

Should I go with a broker that can get a 5.5% rate but will charge more fees, or direct with a bank, with lower fees but a rate of 6.5%? My credit rating is good...refinancing to include local taxes which are are outrageous....for about $185,000....any advice/help is much appreciated.

Refinancing help...what is a better long term option?unemployment rate

I doubt the broker is more expensive than the bank (we rarely are). Make sure to do an %26quot;Apples to Apples%26quot; comparison on your loan. In this case, get a quote from both parties for the same rate. You are getting a quote for 5.5% and 6.5% so the fees will be different.

Next, it depends upon your intentions. How long will you be in the property? If you answer %26quot;a substantial period of time,%26quot; then it is probably worth your time to %26quot;pay down%26quot; the loan. As of today 5.5% is below par and you will have to pay to get that rate.

Best of luck

Offshore banking?

Any recommendations for an offshore bank with low international wire transfer rates and low collateral for credit cards? And possibly no need to send notarized id%26#039;s of everyone in the company, just the signers?

Offshore banking?inflation rate

Today the best offshore jurisdiction is Panama. The banks there can get over 100 billion dollars in assets. They are modern and well regulated. they have anonymous corporations and foundation with extreme bank secrecy. They offer online banking and secured Visa cards with deposits of 110% of credit limit. Wires fee rates run about $40. For more information on offshore banks go here:

http://www.panamalaw.org/offshore_bank_a...

http://www.panamalaw.org/attributes.html

http://www.panamalaw.org/tutorial_offsho...

http://www.panamalaw.org/panama_economy_...

Offshore banking?

loan

You should be aware that the IRS has closed a lot of the loop holes for offshore banking.|||Sad experience tells me that the less rules the more likely I am to lose my shirt when a %26#039;bank%26#039; goes under.

I was in a well known tax haven and asked how many banks were in town %26quot;83%26quot; said the local. Not bad for a town with one short street. One doorway I went past had 15 bank brass plates next to it. It was a stairway to an apartment.

Best of luck - don%26#039;t expect ANY security.

Rising US LIbor?

If the Fed is cutting interest rates, shouldn%26#039;t Libor also fall along

with it? Assuming that the difference from the prime rate and the Libor rate is the interest banks make from lending dollars, shouldn%26#039;t the spread be narrowing as the Fed cuts rates. I just don%26#039;t see any reason why Libor is still continuing to rise.

Rising US LIbor?loan

You are on the right path.

As you pointed out, there is a spread. In the Financial world, this is called the %26quot;Ted Spread%26quot;. The Ted Spread has been widening because it is a function of supply and demand. US Libor is influence by many different bond instruments, but mortgage backed securities are by far the biggest part of the demand side. Normally, with all else being equal, the Ted Spread stays stable when the Fed Rate falls, which leads to lower interest rates. But this is not the case.

As you%26#039;ve read in every newspaper, the mortgage industry in the US is the dog house with volumes way down. The spread is widening while the base rate (Fed Rate) is falling, with net-net higher interest rates.

This is not necessarily a bad thing. It%26#039;s more of a normalization from %26quot;giving a mortgage to everyone who has a pulse%26quot; to %26quot;giving mortgage to people who are suppose to have them%26quot;.

The Ted Spread should normalize by 1Q08 as soon as Sub-Prime bottoms out.

Why have mortgage rates been low lately? And what are the determining factors for the rates?

We are planning to refinance our house, and we want to get an idea on when to lock a rate and apply for a loan form the bank.

Why have mortgage rates been low lately? And what are the determining factors for the rates?payday loan

Rates have been lower because the market has been slower. Now (between Thanksgiving and Christmas) is always the best time of year to purchase or refinance. Rates are usually lower at this time of year.

Why have mortgage rates been low lately? And what are the determining factors for the rates? loan

Rates are controlled by the 10 yr treasury bond, and more specifically by MBSs, or mortgage-backed securities which are also traded publicly on the secondary market.

A rule of thumb is that when bond prices drop, mortgage rates rise, and when bond prices rise, interest rates go down.

There are many factors that come into play, including inflation. Because the Fed has kept rates steady, inflation worries have subsided, and interest rates stay down as inflation is perceived to slow as well.

Learn about mortgage, credit, and finance:

http://www.thetruthaboutmortgage.com

Does anyone know about Honda's Graduate Financing Program?

I%26#039;m graduating from school next month, and I plan on buying an %26#039;07 Civic EX Coupe w/Navi. I%26#039;ve tried doing some research into financing, and have found where Honda offers a Graduate Financing program. Does anyone know any specifics on this program?

I plan on putting $9,000 down (roughly 40% of the sticker price), and have started a full-time Credit Analyst position at a nationally chartered bank in Texas. I%26#039;ve checked into financing through the bank where I work, and the rate was a little steep for my liking (lack of established credit history).

Does anyone know about Honda%26#039;s Graduate Financing Program?auto loan

buy an RSX instead dude.

ive never heard honda offering a graduate program..but i could be wrong. i think toyota does.

But with that much down..your set. you can try through a dealer..theres usually banks that offer programs for graduates/not much credit history

Does anyone know about Honda%26#039;s Graduate Financing Program?

loan

i dont know the specifics but i am farmiliar with the program, basiclly it%26#039;s for new college grads who have not yet established credit or have very little car credit.... but a 40% down payment will greatly increase your odds, i doubt you will even need a co-signer as most first time new car buyers often do.... if the car is $20000 and your putting down $9000, you will only be financing $11k, which will be better for you.. i would hold off on telling the sales person about your big down payment, so it doesnt influence the final negotioated price... work the deal, get a number set , then let them know what your throwing down. and also , since you are a first time buyer , your interest rate may be a little high, what i would do, if i were in your position, is pay an extra $30 or so on every note for the first 10 months, you will eliminate the accrued interest and lower the debt, and your equity will be in good standing, and after the 10 months is done, refinance through a nother bank...|||tyr this link http://www.hondafinancialservices.com/pl...