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I'm sure there's no easy answer to this question, but I'm curious what y'all might do if you were in my shoes.

I bought a home in Atlanta in 2004 - 80/15/5 piggyback with the 1st mortgage being a 5/1 IO ARM (yeah, I know...), 2nd a HELOC. The ARM adjusted downward in June to 3.875%. I've paid off the HELOC so now owe around $149,000. The loan is now fully amortizing, but payments are very affordable.

I originally bought the home for $189,900 and I get wildly different answers as to what it's worth now.

The ARM has 2% annual caps, 10.375% lifetime cap. Index is the 1 year LIBOR, margin is 2.5%. So the worst my loan will be next year is 5.875%.

Problem is, I don't know how long I'm going to stay in the house. I got married, but my wife lost her job so we're staying put for now. But it's a small house for the 2 of us and I'm thinking no more than 5 more years here - enough time for the market to hopefully turn.

Now the 30 year FRM is drifting under 5% as I write this. I lost out on the sub-5% rates from the spring and have been kicking myself. I'm tempted to get out of the ARM so I don't live with drama every year. But I don't know if I can make up the closing costs, especially since I'll take a hit in year one.

I guess it's a roll of the dice anyway, but I'd be interested in hearing any reactions, suggestions, etc. It's been keeping me up at night!
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