No. of Recommendations: 0
I was looking at PenFed rates and saw a 5yr adjustable mortgage at 2.75% for the first 5 years then adjustable by 2% a year.

They mention "No Origination Fee – No Points" but I'm assuming there must be other fees such as a home appraisal. Are there any good ways to estimate how much they generally run?

On a side note how do they advertise a 2.75% rate but an APR of 2.67%? Its been a while since I looked at the math of interest rates but I had always assumed the APR would be no lower than the interest rate. Are they including some kind of reimbursements?

I'm torn between the safety of a fixed rate versus a lower adjustable rate. Mine is currently 3.99%, 30 yrs that I got a year ago. I really don't want to stay in this area (MD) long term but that will depend on jobs.

I'll probably just let things go for a while and figure out the job thing first since I doubt the rates will go up for a while but lowering my payments by $200+ per month is tempting.

Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.