DH and I are in the process of applying for our first home loan we both decided to go with fixed rate but I'm curious if thats what most people do or if any of you benefitted from a variable rate? Before the trump win the rates were much lower but suddenly jumped up, so if we picked fixed rate we might get stuck with a rate that possibly might come down soon..
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If rates are down in a few years, you can refinance. There's no way I would take the risk of a variable rate.
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I wouldn't do a variable rate or ARM right now unless I seriously thought I would have my home mostly paid off before the initial rate term expired. The rates are so, so low right now (even after the small recent post-Trump bump) - I don't see them going that much lower 5/7 years from now. I'm not taking a bet that rates will go much below 3% years from now
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I would never do my full mortgage on an adjustable rate. I've seen what could happen and would never suggest it. Rates are so low right now, there is no reason not to go with a fixed rate.
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ok thanks ladies we were thinking the same thing as you guys
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Yup, we did fixed rate. The ARM/variable rate scare us, and I think its just too risky. We were able to refinance with a lower rate about a year after we bought our house so we're pretty happy.
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We have fixed now on our house, but on our condo we had a 7 year arm. But we knew we wouldn't be living there that long so it made sense.
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Variable rates reset initially after 5 years, then every year after that. DH's opinion is that this administration will increase rates- already he's doing things within in his org (financial part of Fed Gov't) past presidents never have. If you plan to stay less than 5 years get a variable because it's cheaper, more than five lock in the best. Fixed rate you can.
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Rates are just going to go higher probably... I'd lock in while they're still pretty low
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Variable is so risky and rates are great right now, so we have a fixed.
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I only know of one couple who did a variable rate and it did not work out well for them. Our mortgage is a huge expense for us, it's not something I'd take chances with.
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Variable rate loans are great for wealthy people. There are loans out there that adjust every year, on indexes most of us have never heard of. They also allow for greater flexibility in terms of repayment. BUT for the average homeowner, myself included, the fact that you know what you're in for is huge.
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Yes, a variable would have been way too risky for us and we got a very good interest rate (less than 3%).
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Yes. Especially now with the administration change.
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Thanks everyone you all make good points
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14 comments