<<Why not take a 30 year fixed for a lower payment, and then pay it like a 15 (or whatever shorter term) to realize a savings?>>1) Mortgage money is the cheapest money you can get. What is the advantage of paying it off quickly?2) The "savings" merely increases your net worth on paper---you don't get any benefit until you sell or refi your house. And what's the point of paying the loan down if you are going to take money out by refi'ing?3) A 5/1 ARM is cheaper than a 30yrfixed. In my case, even if the rates max out at the 5th year, it will take about 7 1/2 years for the cross-over point. And that's worst case.<<the various nuances associated with managing the combo loans, may be too sophisticated for the average borrower>>Nope. Two loans, two payment books. No different from adding another car loan.
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