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Personal Finances / Buying or Selling a Home
|Subject: Re: financing the next house||Date: 2/16/2014 6:25 PM|
|Author: JAFO31||Number: 126821 of 127956|
CCinOC: "I can understand that, but for the benefit of other readers...since the 1-month LIBOR ARM recasts each month, more of the fully amortized payment is going toward principal than would the fully amortized payment for a 5/1 ARM, thereby making the 1-month LIBOR ARM as stable as a 5-year ARM and saves interest, too.
$750,000 loan amount
Conventional jumbo 30-year fixed rate: 4.30%
Balance after 5 years: 674067
1 month LIBOR ARM: 1.75% amortized over 25 years
Balance after 5 years: 617430
674067 minus 617430 = $56,637 difference!"
You are using two different amortization periods, as a result, I do not believe that the comparison is apples to apples.
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