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Which type of physician mortgage to get?

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  • Which type of physician mortgage to get?

    30 year 5/1 ARM, 7/1 ARM, or 10/1 ARM?

     

    Thinking about 5/1 ARM and then refinance after 5 years for hopefully lower interest rate. Thoughts?

     

    0% down, no PMI

  • #2
    The type of loan is probably dependent on what type of home you are purchasing.  Is this your long term home or something you are purchasing while in training that you probably will sell?  Mortgage rates are slowly increasing as Fed rates continue to rise.  If you are going with an ARM in hopes of refinancing after the reset, there is risk that the mortgage rates will be higher at that point.  The ARMs are worth it if you plan to sell the home before the ARM resets or pay off before the ARM resets.  Current mortgage rates are still very low compared to historical averages.

    If you are planning to keep long term then exploring fixed rate may make more sense.

     

     

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    • #3
      as AnjaliFIT said, there's no evidence that rates will go down in the near-or-middle future. Rates are still historically low but they're creeping up. The fed is expected to raise rates two more times this year. Beyond that who knows but given we're already still at historic lows, it's much more likely that rates will go up rather than down

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      • #4
        At this point, I would go with a 15 year fixed. If you did go with a 5/1 or 7/1 ARM, it should be because you know you won't still be in the house at that time. But then, if that were true, I'd question the house purchase in the first place.

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