In this kind of rate environment, which is better? 5/1yr ARM, or 30 year fixed?

Very good question indeed. It really does depend on what you think rates might be in 5 years. Are you going to live there beyond 5 years? Would you risk it? Im in the high 3% for a 5/1 and in the high 4% on 30 year fixed. I have lower fees than most and will sacrifice less on my paycheck for your better deal! I lend in all States and located in CA. Click on my click for more info. Hope this helps! RC

The answer is not as cut and dry as that, there are many questions that have to be answered before anyone can advise you on what to do. You should speak with a licensed, California loan officer and communicate what your long and short term goals are. contact me if you need assistance, I would be happy to evaluate your specific situation and advise. Gregorio Denny - http://WeFixRates.Com - 800-335-6897

The real question is the difference in rate worth the risk of uncertainty in 5 years. So from that you are really asking what are rates in 5 years going to be at. I think Rates will be higher is 5 years. However there are circumstances where a 5 year makes a lot of sense. If you want a licensed LO to talk through it with you give me a call. Thanks

Great question. Here is the short answer, it depends on if you going to be in this home for more than 5 years or not. If no, then go for it. If yes, then go with a long term fixed for security. If maybe, then I would be conservative and go with the longer term.

It appears that you have received good advice from my colleagues in the previous posts. The only other thing to consider is whether you will qualify for a 5/1 ARM or not and of course, whether you will still be in this loan 6 years from now. If you qualify for the 5/1 ARM, then it is a better deal as long as you plan to be out of the loan within 6 years. If you plan to stay in the loan 6 years or more, then the fixed rate is the better long term scenario for you.I can lend in all states and can be reached for further discussion at 866-901-3576. Patrick McCarthy, Northpointe Mortgage