I have a 30 year jumbo fixed rate mortgage. I don't plan on staying in my home for more than 5 years. Should I be switching to an adjustable rate mortgage (ARM) and get a lower rate?

ANSWER

The BIDaWIZ Team's Answer:

It depends on your closing costs and how long you actually plan to stay. If you're not planning on staying at least 3 years, it's probably not going to make sense because the interest savings likely won't cover the closing costs. If you're planning on staying 4-5 years or maybe more, it probably makes sense to move to an ARM. Also, while a 5 yr ARM has a lower rate than a 7 yr, unless you're sure you'll be out by the next 5 years, we would recommend a 7 year ARM to give you more flexibility. We really do not know where interest rates will be in 7 years.

References: US Treasury Rates State: New Jersey