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Subject:  Re: real estate Date:  2/9/2004  9:44 PM
Author:  pauleckler Number:  39072 of 102702

An adjustable rate mortgage (at lenders option) is to the lenders best advantage when interest rates are low. And you probably have no idea how high rates can get in the latter 5 years.

If you can find a fixed rate mortgage for the whole period right now at todays low interest rate, that is probably a better deal. You can easily sit down with a spread sheet and work out what has to happen for any given rate to be equivalent.

The loan you are talking about gives you low payments because you are paying no principle. But that is not a good deal if later you must pay higher interest rates or refinance at higher rates.

Look out. Calculate carefully.
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