What morgage would you prefer?

[Dylan Thomas]

What would you prefer?

Residential investment property

80% ltv at 4.625% on a 10/1 arm (30 year)

OR

75% ltv at 5.5% on a fixed 30 year

I’m not concerned at all about the 5% ltv up front so please don’t let that be a factor. More looking at interest rates and adjustable vs fixed.

Obviously a lot lower interest rate on the first, but the adjustable rate scares me some. What happens if we go back towards the Carter days when interest rates were up in the high teens? Would be nice to have a fixed rate if we did in fact go there. But if we don’t then it would be awesome to pay 1% less over the term of the note.

What are your guys thoughts?

Thanks!

Dylan