With how nuts things have gotten lately with rates, my lender reached out to let me know my buying power has gone down quite a bit, even with their lower than industry standard rates. He prefaced this with “I’m no financial advisor but…” before recommending we go with the 5.25% ARM over the 6.5% traditional 30 year, and definitely put no points down.
We are intending to put 20% down on a theoretical 700k home in MA, and our payment has ballooned significantly from when we started looking in August. The thought would be that there’s a pretty low chance rates stay in the high 6-7’s for the next 5 years and we will refinance at first opportunity. Looking historically, rates have not been above 7 consistently since 2001; it seems pretty unlikely to not return to what’s been “normal” the last 20 years.
Curious what others are thinking as our other option is to basically sit this out and pray everything comes down (either home prices or rates). We’d be renting and saving an extra 1k/mo over the home purchase this way… but we are also expecting a child in the next year.
submitted by /u/Faustus2425
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