Home Buying in Foster City>Question Details

Dhiraj, Home Buyer in Sunnyvale, CA

I am on a 5/1 ARM and was planning to move to 30 year fixed. My broker is good and has helped me get a good rate. But after Fed's announcement to keep

Asked by Dhiraj, Sunnyvale, CA Mon Sep 17, 2012

I am on a 5/1 ARM and was planning to move to 30 year fixed. My broker is good and has helped me get a good rate. But after Fed's announcement to keep the rates low for a long period of time, I am wondering if I am making the right decision. So I wanted to keep the 5/1 ARm for some more time and refinance later. Unfortunately, i signed the notary papers yesterday and am starting to think like that only today. I have 2 more days to rescind and wondering what would be the penalty? I paid $400 out of pocket for appraisal and thats it. Will i loose only that or more? I am in CA.

thanks,
Raj

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4
If your loan hasn't been funded I don't think any early payoff penalties could be applied but ask your loan agent.

You didn't provide many details about your ARM. You might be surprised how little more you spend on interest after converting to a fixed loan. You have to decide your own tolerance to the risk carrying an ARM.

One advantage of low interest rate loans, if they are paid at a fully amortized rate, is that you will be building equity much quicker early on than with a higher interest rate loan even though your payments are lower. Please take a look at:

http://julianalee.com/blog/buying-a-home/good-time-to-buy-or…

Juliana Lee
650-857-1000
Keller Williams Realty
Web Reference: http://www.julianalee.com
0 votes Thank Flag Link Tue Sep 25, 2012
My understanding is that you will only lose the appraisal cost. On another hand, there is no guarantee that fed policies will succeed keeping the interest rates at the current level. You may benefit by keeping this new loan. Place your bet and watch the wheel spin.
Web Reference: http://talisrealestate.com
0 votes Thank Flag Link Mon Sep 17, 2012
You will lose your money for the appraisal.
There should be no other money you will lose.
If your new loan was a no points no cost loan, you should take it and ride with that one. You can always refinance if rates go lower...how could they?
0 votes Thank Flag Link Mon Sep 17, 2012
Do the conversion and sleep better at night. The one thing you can depend on with the future is that you can't predict it.
0 votes Thank Flag Link Mon Sep 17, 2012
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