As I slogged through a soupy nineteen mile run over the late August weekend (in preparation for October’s Milwaukee Marathon and, perhaps, a fall 50K), varied thoughts sloshed in my brain. I wondered at one point whether there is a way out of the marathon lifestyle (long ago having thought running a 2:57 would get me out and realizing daily it didn’t) and since there is not, my thoughts turned to two other, oddly related topics: the changes August brings and adjustable rate mortgages, known as ARM’s.
August can be a steamy, oppressively hot, July holdover with the added nuisance of thunderstorms capable of producing hail and heavy rain (I read that in red print on my smartphone). Or, later in the month, August can sometimes be a preview of fall requiring jackets, long pants, and the dreaded shoes AND socks. Regardless of weather, August always guarantees rapidly shortening daylight hours – losing 2 minutes per day in August — a full hour by month’s end. That sad fact got me thinking about ARM’s (remember, it was super humid and I was running 19 miles, so stick with me). Just as we lose daylight when we want it most (while it’s warm outside), many of you take loans that are far longer in duration than you need. If you plan to stay in your home the industry average 5-7 years, but take a 30 year mortgage, it’s like paying for daylight you never get (a stretch, perhaps).
Lately, my clients have been asking me for 7 year ARM’s and we have some good ones. Among the greatest features of these loans: start rates are often a full percent below a 30 year, the first adjustment (beginning with year eight) is often capped at 2% above the initial rate, and the indices these ARM’s track moves very slowly. To go into greater detail is beyond the scope of this email, but if you think you might leave your home in 5-7 years, or you are looking to buy, and an ARM might fit your time horizon, please contact me to discuss a best-fit ARM for you and your family.