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Penfed 5/5 ARM Rate Reset Roulette

462 February 7, 2018 at 06:57 AM
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For everyone else that ran through this, I'm contemplating the rate reset.

Current Rate: 2.75%
New Rate: 4.5% August 2018
Their Offer: .0625 of today 5/5 Rate - 3.4375%

Now I have until 45 days before my 5/5 reset to take advantage of this special offer. It'll bump my payment right now ~$220 so ill be spending about $1400 more for the next six months, but I'll make that up before the end of the year with the savings of not going to 4.5%.

Now the question is - do I wait a few more months or lock it in now. I like the idea of saving the $220 until I absolutely need to lock it in, but don't want to be screwed if their 5/5 goes up.

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#2
5/5 probably will go up, almost a guarantee I bet
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#3
refi a 15 year fixed now if you can

rates going up probably until the end of 2019 I bet
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#4
Quote from bimmerboy
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refi a 15 year fixed now if you can

rates going up probably until the end of 2019 I bet
I agree!! I'm looking to refi to a 15 year rate. Any suggestions on where I can get the best with low or zero fees?
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#5
This is nonsense, if rates were such a lock to rise, they would have already risen by frontrunners in the bond market and the bank wouldn't offer this "deal" to you.
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#6
Your definitely right that it's not a lock to rise. The bank however has other considerations in particular they know many take an ARM planning to refi in a couple years. The bank may wish to retain this business and thus makes an offer they are comfortable with but also entice you.
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#7
Wow....rates are up to 4.5%. I have a pair of mortgages at 2.75% myself expiring in the next year.
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#8
Quote from Krazen1211
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Wow....rates are up to 4.5%. I have a pair of mortgages at 2.75% myself expiring in the next year.
That's just the mandatory 1st reset. I have 2.75% and it automatically goes to 4.5% for the next 5, then does market rate from there.
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#9
Quote from dhodson
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Your definitely right that it's not a lock to rise. The bank however has other considerations in particular they know many take an ARM planning to refi in a couple years. The bank may wish to retain this business and thus makes an offer they are comfortable with but also entice you.
Well rates did end up going up, so I'm out an 1/8th of a percent. Nothing on the market made sense, because everybody adds junk fees or "points" to get the rate near there, so I pulled the trigger.
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#10
Quote from lotusgardener
:
For everyone else that ran through this, I'm contemplating the rate reset.

Current Rate: 2.75%
New Rate: 4.5% August 2018
Their Offer: .0625 of today 5/5 Rate - 3.4375%

Now I have until 45 days before my 5/5 reset to take advantage of this special offer. It'll bump my payment right now ~$220 so ill be spending about $1400 more for the next six months, but I'll make that up before the end of the year with the savings of not going to 4.5%.

Now the question is - do I wait a few more months or lock it in now. I like the idea of saving the $220 until I absolutely need to lock it in, but don't want to be screwed if their 5/5 goes up.
How early did you receive the special offer? Also, did they send you some sort of email notification or something through snail mail to notify you of the offer?

Curious for when I should expect to receive something. My rate reset isn't until February 2019.
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#11
November reset in August. It just appeared under the balance when you log into your acct. I actually called in because I was expecting some kind of letter or something.
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#12
Did you end up accepting the rate reset?
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#13
I am in the same situation and received the similar mortgage reset option from penfed.
Any suggestions on the re-finance options? Any good mortgage lender to call?
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#14
Quote from k12k30
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Did you end up accepting the rate reset?
Yeah I did. I waited and lost another 1/8th of percent so it's a hair over 3.5% Nobody could touch that unless I went with a 15yr fixed, which I could not afford the payment on. We'll see what happens in another ~4.5yrs.
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#15
Quote from pkpraj
:
I am in the same situation and received the similar mortgage reset option from penfed.
Any suggestions on the re-finance options? Any good mortgage lender to call?
No ones gonna be able to touch their rate unless you pay points or change the term.
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