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Anurag, Home Buyer in Hemet, CA

If I want to stay in the house I buy now for five years, should I go for the fixed interest rate or the 5/1

Asked by Anurag, Hemet, CA Thu Nov 1, 2007

If I want to stay in the house I buy now for five years, should I go for the ARM?

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If you're planning on being there 5 years, if it were me, I'd choose the fixed rate. Many times plans change and you may end up there longer than 5 years. Also, 5 years is not a long time when it comes to building equity. We have no idea what the market will look like in 5 years and you don't want to end up in trouble when it comes to resale. With an ARM you're probably not making as much of a dent on the principal. You also do not know how long it will take to sell your house either, so to me, it's a risk that could be avoided.
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0 votes Thank Flag Link Thu Nov 1, 2007
Anurag,

If you are planning on staying for only 5 yrs the ARM might make sense. But often times things change and 5yr could turn into 7yrs or 10yrs.

Take a look at all options including the 30 yr fixed. Who knows, after five years you might want to start renting the house out?

Regards,

Chris
312-738-8438
0 votes Thank Flag Link Thu Nov 1, 2007
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