Last year at this time we were just getting ready to place an offer on a house in Northridge, moving out of our house of 18 years in North Hills. ellipticcurve was about to close on her new home in Granada Hills, and the bug had bit us. Because of the timing (buying the new place before selling the old), we had gone with a 40-year option ARM (yes, we know). Our intent (which was achieved) was to always make the fully-amortized payment, if not a bit more.
All thoughout the year we have been watching the rates. Until a month or so ago, the Option ARM still had a significantly lower rate. But the rate had crept over 6%, and so we started looking. Unfortunately for us, we were still in the jumbo loan range… which means higher interest rates. The 30-year fixed was resulting in a payment that was uncomfortable, but I didn’t like the direction of the Option ARM. So, we gambled on a 5-year fixed/hybrid (fixed for the first 5 years, then adjusts). We figured this was the right range to put us after the election, when hopefully the rate raising of the fed will be past, and rates will (hopefully) go down.
I’m beginning to think we timed it better this time. Our rate (the loan closes Monday) is 5.625%. According to the Los Angeles Times, 30-year fixed rates are now averaging 6.53%, with the 5-year hybrids at 6.16% (and those rates are for conforming loans; jumbos have higher rates).
Now, to just finish unpacking from last year’s move… but not this weekend; it’s time to play on the trains.
