Quote:
Originally posted by iamtheone
well, as I mentioned above, I recently had twins and the wife is only working part time and the cost of day care for two girls is taking a nice bite out of our income. I thought about selling our home but could not even come close to what we have now. The balance of the loan is roughly 180k, the house would apraise for right around 300k. We have a 5.78% fixed rate for 30yrs now, basically I am looking for something to buy some time until we can get rid of some things..... What is the difference between those 3/1, 5/1 and 7/1 ARM and Jumbos. There are also interest only loans as well.
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Well, that is an excellent 30 year fixed rate, I'd leave it alone if I were in your shoes.
Basically, the difference in the ARMS is the first number represents how many years the loan is fixed for, the second is how often it can change. For instance, the 3/1 ARM means that the rate is locked for 3 years and can change every year thereafter. The lower the "locked in" period, the lower the interest rate.
Jumbo loans are called "Jumbo" because they exceed a certain state instituted amount. Here in Wisconsin, I believe that amount is 387,000 - but it varies from state to state.
You mentioned "getting rid of some things" - did you by chance mean to pay off some other debts? If that is indeed what you are thinking about doing, you may want to consider a second mortgage. That way, you'll still have your rate on the first, but consolidating with a second will often times lower your payments substantially, in addition, the interest is generally tax deductible.
If you have any more questions, just ask
