Is 30 Year Fixed Rate Mortgage Better Than 2-28 ARM?
Scenario: I have been recently approved for a 2/28 ARM with 5 year interest-only period and received a commitment letter. I filed bankruptcy 3 years ago but my spouse, the co-borrower has good credit, about 730. The mortgage company said the loan would adjust every 6 months. But I expected to handle this loan only for 5 years as I would pay off the car within the next 2 years. Also within the next 5 years, the bankruptcy could be erased from my credit report. Another company has offered me a 30 year fixed rate loan with 5 year interest-only payment plan. I’m trying to build up equity and refinance into a 5 year with a low rate. I’d like to know more about what I can qualify for and build up equity. Solution: A 2/28 year ARM is an adjustable rate mortgage which offers a fixed rate of interest for the first 2 years after which the rate adjusts itself. If this loan program comes along with a 5 year interest-only option, then the first 2 years may be great because there’ll be no rate incre
