San Diego Mortgage Rates Report: February 14, 2007- ARMs Building Muscle

I fell in love with ARMs again, after a five month hiatus.  Hey!  It's Valentine's Day so I can tell you a love story.  This love affair has been going on since I was in my 20s.  The sexy allure of adjustable-rate mortgages were replaced by the stability of that old battle-axe, the fixed rate loan.  The culprit was the flat yield curve.  I dig curves so my eyes popped out of my head when I opened my e-mail this morning.

Adjustable-rate mortgages walked into my life like a wild-eyed, long-haired, bombshell on a Harley, toting a bottle of tequila.  Normally, I balance her beauty with the risk she presents but I promise you, she's a changed woman.  This time, she promises to stay put for a ten-year period.  Frankly, ten years is plenty of time for me to outlast a few bumps in the economic road; it's a relationship worth having.

I'm talking about the spread between a 30 year, fixed rate loan and an ARM with a ten-year fixed period.  The 30 year mortgage is around 6.0% while the ten-year fixed rate ARM is offered at 5.25%. Ten years is a LONG time, regardless of the economy, so I'm recommending that over the fixed rate loan.  Let me illustrate how long ten years is for you.  In 1998:

1- Smoking was banned in all California bars and restaurants
2- Mark McGwire broke Roger Maris' single season home run record
3- The Belfast agreement for peace in Northern Ireland was signed.
4- The Padres were in the World Series.
5-  Apple Computer unveiled the iMac
6- Microsoft was convicted of monopoly.
7- Monica Lewinsky redefined the phrase "sexual relations"
8- Google was started.
9- Jesse Ventura was elected Governor of Minnesota
10- The movie Titanic won the Academy Awards.

Do you see where I'm headed with all of this?  Ten years is a long time.  Forget 30 year fixed rate loans if you think you might move, retire, refinance, or send a kid to college between today and 2018.

The ten year loan at 5.25% (5.51% apr) is just too damned sexy!

Please contact me:

Call me at 858-777-9751

E-mail me at brian (at) californialoanconnection (dot) com

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