Comparing the 30-year fixed to the 5-year ARM Apr 2009-Apr 2010

Each week, government-led Freddie Mac publishes a weekly mortgage rate survey based on data from 125 banks across the country (Walworth State Bank is not one of them).  According to this week's results, the relative rate of a 5-year ARM in Lake Geneva, Wisconsin is extremely low versus its 30-year fixed-rate cousin.

Consider this comparison:

  • In April 2009, the two products ran neck-and-neck with respect to rates
  • In April 2010, the two products are split by 0.99 percent

On a $200,000 home loan, that's a difference of $117 per month to a mortgage payment.

Adjustable-rate mortgages aren't suitable for everyone, but they can be a terrific fit given your individual circumstance.  For example, any one of the following scenarios could warrant a 5-year ARM:

  1. Buying a home with an intent to sell within 5 years
  2. Currently financed with a 30-year fixed mortgage with plans to sell within 5 years
  3. Interested in low payments and comfortable with longer-term interest rate and payment uncertainty

Additionally, homeowners with existing ARMs may want to refinance into a brand-new ARM, if only to extend the initial change date on the current note.

Before opting an ARM or a fixed, speak with your loan officer about how adjustable-rate mortgages work, and what longer-term risks may exist.  The savings may be tempting, but there's more to consider than just the payment.

Travis Egan

Asst Vice President  

Walworth State Bank

1221 South Shore Drive
Delavan, Wisconsin, 53115
US

Work: 262-728-6209

Mobile: 262-745-5055

tegan@walworthbank.com

www.walworthbank.com

Lender, Lake Geneva Real Estate

 
 

1 Comments on It's A Good Time To Look At Adjustable Rate Mortgages For Lake Geneva Real Estate

MAY
27
2010
216,770 Points 1 Featured Post Attended Rain Camp Called Shot Master

You offer some great information in your blog Travis.  I'm subscribing.  Do you mind if I ask where you get such great charts?
9:46am • #1


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Travis Egan - Lender, Lake Geneva Real Estate

Travis Egan NMLS # 655284

Lake Geneva, WI

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Office Phone: (262) 723-1973

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