Reply to does it make sesne to consider a 5/1 ARM?

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[quote=Anonymous]we are just about to close on a house and do a 7:1 arm on a house that's over a million in Mclean.  The ARM's of today are a slightly different beast than what they were even 5 years ago.  They max out---so my 'worst case scenario is upping it to about 9% as the rate for the remainder of 30 years after the 7 years is up---which I can manage if I need to.  If you look at a mortgage calculator, you can do a lot more with your money, and pay down a lot more equity with an arm than with a 30 year fixed.  So we are doing the ARM for now.  We may move, we may not---but I figure I can then pivot and lock a 15 year fixed in 7 years if I have to, and doing the math, I have 2 percentage points to play with even if interest rates rise in the next 7 years.  If you look at what the fed has been saying about interest rates---for at least the next 5 years, I'd bet that rates are not going up much.  But then again I'm betting.  I may be wrong.  If we move---I figure we won't be in the house for more than 7 years, so even then, I'll come out ahead.  Ask me in 7 years if it was a smart decision or not. [/quote]

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