I am looking at houses in the West Chester, PA area and am trying to decide on whether or not to finance using an ARM (either 5/1 or 7/1). Any advice?

Asked by Ateutsch1, West Chester, PA Fri Feb 24, 2012

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Arleen Pecone, Agent, West Chester, PA
Tue May 29, 2012
That will depend on how long you will be staying in the house and on your personal circumstances and the type of house you are buying.

The ARMS are great for getting "more house" while you are young because you will make more money in the future and it may be a great way for you to buy bigger that you will not have to move from in a couple of years.

A lot depends on your circumstances.
0 votes
Alan Openshaw, Mortgage Broker Or Lender, Southampton, PA
Wed May 23, 2012
Hello Ateusch,

I always look at a fixed rate as an insurance policy. It gives you certainty in the future. If you have had an ARM for the past 25 years you have made a good choice and saved a lot of money. However, if you are getting an adjustable rate at this point in time you had better have an exit strategy in five or seven years. Don't assume that you will be able to refinance because if property values are 20% lower you may not have sufficient equity., I am not saying this will happenbut I am saying that you shouldnt make unreasonable assumptions. Be careful. An arm can save you meny but if you have to reifnance in 5 years everything points to higher interest rates and (my opinion here) lower property values then.

Regards,
Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010
NMLS ID 143960
0 votes
Daniel Robins, Agent, West Chester, PA
Wed May 23, 2012
Call Sean Phelan at 215-317-2306, tell him I told you to call, he's the best in the biz
0 votes
JoAnn Hall, Agent, Kennett, PA
Wed May 23, 2012
I live in West Chester and can help you. Call me at 484-459-3829
0 votes
Melissa, , West Chester, PA
Sat Feb 25, 2012
Hello Ateutsch,

I am a mortgage broker who lives in West Chester. Usually, when someone is considering a 5/1 arm, they have a specific reason for this. There are a few scenarios where this makes sense. Perhaps you have been transferred with your company and are fairly sure this will happen again... With interest rates as low as they are now, the question you need to ask yourself is, "how long do I plan to own this home?". That answer will help determine which type of loan is best suited to you. Please call or e-mail me if you have any other questions. I am always happy to help out!
Melissa Terlizzi
Excel Mortgage
mterlizzi@excelmortgageusa.com
nmls#480563
0 votes
Nick & Trudy…, Agent, Devon, PA
Fri Feb 24, 2012
You already have had some great advice. It really all depends on your plans and future plans. How long do you intend to remain in the house or the area? Realize house prices are going to be pretty flat for the next few years and may still go down slightly, so if you do need to refinance that can affect you. Rates are most likely to climb, already this week they have come off the bottom for the first time for several weeks, what they will do in the next 5 years is most likely to rise. If you do transfer, how easy will it be to sell this house before you rate re-sets. Can you afford to carry the house when the rate re-sets?

All this being said, talk with a mortgage broker, Eric May as noted by Rob Hughes is a good mortgage provider out of our office, there is also Jeremy Durkin of Prosperity Mortgage in the same office. I have posted a link to a list of local loan officers who all offer good rates and can assist you in making the decision. There are other options such as a 10 year arm, rates are a little higher but still less than a fixed and give you slightly longer before the rate will rise.
0 votes
Claudia Moss…, Agent, West Chester, PA
Fri Feb 24, 2012
Hi,
I would refer you to my mortgage broker on this question. Your circumstances would determine what kind of loan would be the best for you.
You can contact Tracy Thatcher (at Prosperity Mortgage) at TracyThatcher.com or her cell is 610-246-7792. Call her anytime. Also, let me know if I can help you find a home in the borough. I live in the borough myself and its an awesome place to live.
Claudia 610-2134-4225 (cell)
Long and Foster
West Chester, Pa 19382
claudia.moss@longandfoster.com
0 votes
Robert D Hug…, Agent, Devon, PA
Fri Feb 24, 2012
Ateutsch1 with interest rates as low as 3.75-4% for 30 year fixed rate why would you want an ARM?? Interest rates have never been this low. Best to lock into a 30 year FIXED commitment in my opinion. Interest rates will be going back up in a year or so, and so will Adjustable Rate Mortgages.

Let us know how we can assist further:

A great mortgage representative- Eric.May@prosperitymortgage.com 484-0716-4299

Rob Hughes: Long & Foster Real Estate Inc.
(Associate Broker) (AB065650)
(Hughes Associates) (Realtor since 1987)

Office: 610-225-7400 x7438

Cell# 484-410-9765 (Preferred)

http://WWW.DELVALREALESTATEOFPA.COM

http://WWW.ERICMAYMORTGAGE.COM
0 votes
Alan Openshaw, Mortgage Broker Or Lender, Southampton, PA
Fri Feb 24, 2012
Hello Ateutsch,

I prefer the 5 year over the seven year as the rate seems to be much better.
However if you are deciding whether ARM or fixed, I can give you some reasons to choose an ARM.

In a few years you will definitely be selling.
Money is tight right now but in a few years you will have better cash flow.

A fixed has certainty and to me is like an insurance policy. Lets assume you get and ARM and want to refinance in 5 years. What if property values continue to decline and you do not have enough equity? What if you get a divorce and now can't use the spouses income? What if someone steals your identity and destroys your credit? What if you get sick and lose your ability to earn?

Right now with fixed rates being so low I say don't try to get to smart unless you really have thought this through.

Regards,
Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010
NMLS ID 143960
0 votes
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