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Personal Finances / Buying or Selling a Home


Subject:  Re: 30 FRM cheaper now than 5 yr ARM Date:  9/26/2012  6:26 PM
Author:  CCinOC Number:  124317 of 128866

You're right, AJ; the decision is strictly situational.

My brother, age 64, is going to buy a house for $89,900. He's putting 30% down.

69930 x 3.00 = $294.83 (per month, amortized over 30 years)

The payment is far cheaper than rent for a comparable house. In his situation, it doesn't matter if he ever pays off the mortgage. However, had he wanted to pay off the mortgage, a 5 year ARM would serve him well, as he can easily afford the payment.

69930 x 2.375 = $1,237.22 (payment required to pay off in five years)
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