[bloodc]

I currently have a 5 year ARM at 4.5% interest we initially decided on it
Because we thought our company would move us before 5 years. Now we
Have decided we both like it here and know we will stay past the five years.
We are currently in year 2 of the 5 year ARM. Now I am trying to decide
What I should do keep it until term or start looking at moving it to a 15 or 30
Year loan. What are my options? And what are the potential pros/cons and
Costs of those options? Both me and my wife have good credit and make
Plenty of money to afford our current house. So the so called mortgage melt
Down should not have an affect on us personally. We actually need the interest to help
From paying so much income taxes.

Thanks for the help

Cody Blood

[RichardBondMan]

You don't say if there is a cap on the interest on your 4.5% ARM and if there is, at what interest rate it's capped and when. With your good credit and interest rates not much higher than your current ARM rate, what can you lose by going with a fixed rate if I am correct and a fixed rate is not much more than your current rate. Let me answer my own question and say that you could lose the difference between 4.5 % and say 5.5 % plus you costs, if any, to refiance (closing and other costs that might be involved) so you then have to determine what the interest rate on the ARM might go to in 3, 10, 15, 20 years and that's a hard one to guess at. If you refiance and obtain a fixed rate loan, will you have the necessary equity to avoid PMI, (private mortgage insurance) and if you refiance, is it better to go with a conventional or VA loan? I would with a real estate broker, another lender and your mortgage company, and then make your decision.