There are a few factors that play into this. Do you qualify for any special financing such as FHA, VA, USDA, etc? There are certainly loans out there that you can get at 5% down.
As of Friday, the conforming loans with a 30 year fixed rate were somewhere around 4.5% and the 5 year ARM was around 3.125%. Not sure about the 7 year ARM. Most ARMs have a 1 point per year limit to their increase after the initial term is complete, so a 5 year arm could reset to 4.125% at year 6, then 5.125% at year 7, etc depending on the interest rates at that time.
What would be best would depend on your personal situation, your time frame, and how long you felt you were going to be in your home. If you are like the average home buyer, you will move after 5-7 years, then a 5 or 7 year ARM would be a no-brainer. If you had a longer time frame (10years+), then the fixed rate may be a better option, but again it depends on several personal factors.
You should definitely speak with a lender about your particular situation, finances, and other factors (such as your income to debt ratios, etc). If you would like a list of lenders that I have used in the past, I would be happy to get you in touch with them. If you need help buying that home, I would be happy to assist you in that as well.
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