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I am trying to choose between two different lenders for 100% financing.
1st lender:
80% -> 1st mortgage - 5.25% - 5/1 ARM Int. only (1 yr LIBOR) (annual cap 2%, lifetime cap 5%)
20% -> 2nd mortgage - 5.00% - (Prime + 1) adj. monthly

2nd lender:
75% -> 1st mortgage - 5.25% - 5/6 ARM Int only (6 month LIBOR, adjusted every 6 months) (intital change cap 5%, periodic cap 1%, lifetime cap 5%)

25% -> 2nd mortgage - 5.00% - (Prime + 1) adj. monthly

closing cost -> 1st lender's cost is $500 more than 2nd lender.

Let me know, which one is better?
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