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Picked a 30-year fixed mortgage over an ARM last year and the numbers worked out way better than I expected
When my wife and I bought our first house in Phoenix last June, our lender pushed hard for a 5/1 ARM with a 4.2% rate. But I ran the numbers on a spreadsheet showing rates climbing every quarter, plus I did some digging on Reddit about ARM resets. We stuck with the 30-year fixed at 5.8%, and now with rates over 7%, I don't feel like I'm trapped. Has anyone else here dodged a housing bullet by ignoring the easy numbers?
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the_jake2mo ago
Wait, your lender was pushing an ARM at 4.2% last year? Bro that's insane they were still offering those. I thought most places had stopped doing those weird intro rates by then. Seriously though, you made the right call. I read a thread on here where a guy's ARM reset from like 3% to almost 9% and he couldn't refi or sell because his house lost value. It's terrifying how fast those things can go bad. Your gut feeling about the numbers was spot on, and it's good you didn't let the lender talk you into something risky. Now you're probably sitting pretty while everyone else is sweating their monthly payment.
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mason_reed472mo ago
My cousin actually went the opposite way, locked in a 5/1 ARM on his place in Tucson right before rates jumped, and his reset is hitting next month. He's been calling me every night running through refinance numbers but nobody's offering anything under 7% now. Tough spot.
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theas282mo ago
Best thing your cousin can do right now is call his current lender and ask about a loan modification. They'd rather rework the terms than deal with a default. Also tell him to look at credit unions, they're often a point or two under the big banks on refi rates. He might have to eat a higher payment for a year or two until rates come down, but he can buy down the rate with points now and recoup that cost later.
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