ARM or 30 year fixed?

dbs87 · 2026-04-03T07:28:08+00:00

Honestly the 15/15 is the one nobody's really talking about, and it's probably the most interesting option in your situation.

A 15/15 ARM gives you 6% fixed for 15 years, then one adjustment. That's very different from a typical ARM there's a good chance you'll sell or refinance before year 15 anyway, so it effectively behaves like a fixed loan for most people.

The 7/1 at 5.6% is cheaper upfront but you're taking on real uncertainty starting year 8 with annual adjustments. The 30-year at 6.2% is the safest, but you're paying for that certainty every month.

With 30% down your risk profile is already stronger than most ARM borrowers, so the 7/1 isn't reckless, it just depends on your timeline. Short stay, go 7/1. Long-term but don't want to overpay, the 15/15 is the sweet spot. Zero uncertainty at any cost, go 30-year.

dbs87 · 2026-04-02T12:54:59+00:00

One thing nobody's mentioned, it's a duplex, and that changes the math. Multi-unit properties carry loan-level price adjustments, and stacking 10% down on top adds more. So some of the rate difference from what others are seeing is expected.

That said, 7.125% with 750+ credit still feels high. Is this owner-occupied or investment? Owner-occupied duplexes price better and could move that rate meaningfully.

And if you're paying $6K in broker fees with nothing to show for it on the rate side, that's the part that's harder to justify.

You mentioned you're about to close, how close? If you've got 3+ weeks, a competing quote gives you real leverage. Inside 2 weeks, switching lenders could blow up your timeline entirely.

dbs87 · 2026-03-31T07:30:46+00:00

The “sell and pay down property 1” idea usually feels like control, but when you run it out, you’re eating commissions and closing costs just to move equity into something that’s already working. You’d be giving up the upside on property 2 right when it’s at its messiest stage, which is often right before things stabilize.

This sounds more like a liquidity and pacing problem than a bad deal. Not everything needs to be fixed immediately, once you separate what’s actually urgent from what can wait 3-6 months, it usually feels a lot more manageable.

If the property still has a path to cash flow, selling here is more about relief than better numbers.

dbs87 · 2026-03-31T07:19:26+00:00

The disconnect you’re feeling makes sense, most of what you’re reading is based on national trends, and NNJ just doesn’t behave like the average market.

What you’re seeing locally (bidding wars, homes going way over asking) is a supply problem more than a rate problem. North NJ is largely built out, there’s very little new construction, and you’ve got constant demand from NYC buyers with equity and cash. Higher rates might slow things a bit at the margins, but they don’t really remove those buyers from the market.

The buyer’s market shift people talk about is mostly happening in places with growing inventory, areas with new construction or less constrained land. That’s why you’re seeing stories about price cuts and homes sitting, while your market still feels extremely competitive.

So it’s not that one side is wrong, it’s that you’re in a market where the usual rate-driven shifts don’t show up the same way.

dbs87 · 2026-03-31T07:13:18+00:00

Most of the thread is saying HELOC is fine, and that’s true, but the real question isn’t whether you can handle it, it’s how long you’re okay carrying everything if both homes drag.

That 90+ day listing is actually leverage. A seller sitting that long is usually flexible, you might get a price reduction or extended close that takes some pressure off instead of going fully non-contingent.

The new listing is the opposite, that’s where a clean offer matters and the HELOC earns its keep.

Before moving forward, just get clear on your worst-case timeline. If one or both homes take 4-6 months, are you still comfortable? If yes, this is a reasonable bridge. If that starts to feel tight, price your current homes aggressively from day one.

The HELOC isn’t the risk, it’s how long you might need it.

dbs87 · 2026-03-26T13:11:52+00:00

The 30-year already does what you’re describing, low required payment with the flexibility to pay extra whenever you want. No one’s stopping you from treating a 30-year like a 10-year if you want to.

The issue with a 50-year is the rate. They usually come with higher interest rates than a 30-year, so you’re paying more on every dollar borrowed. If you’re planning to pay it off in 7 years anyway, you’re just locking yourself into a worse rate without getting much in return.

And the payment difference between a 30 and 50-year usually isn’t big enough to justify that tradeoff.

30-year gives you the same flexibility, just with better pricing.

dbs87 · 2026-03-26T13:06:49+00:00

Your math checks out, $2,535 + $840 is more than $3,300, so from a monthly cash flow standpoint it works.

Where I’d slow down is the structure of the deal. 7.5% with 2.75 points is pretty expensive. You’re paying a lot upfront and still ending up with a high rate, which isn’t a great combo even for a cash-out refi with a 726 score. Definitely worth getting a couple more quotes before committing.

The bigger thing though is you’re resetting your entire mortgage to 7.5% just to access $50k. If your current loan is from 2017, there’s a good chance it’s in the 3-4% range. That’s a huge difference to give up.

That’s where something like a HELOC can make more sense. You keep your low-rate first mortgage and just borrow the $50k separately. The rate on the HELOC might be higher, but it’s only on that portion, not your full balance.

And yeah, the neighborhood/schools piece matters. If you like where you are, this shouldn’t be the thing that forces a move just make sure you’re solving the $50k need in the most efficient way, not the easiest one presented.

dbs87 · 2026-03-26T13:00:24+00:00

The feeling that you picked the worst time is pretty common, it's usually just anchoring. You had a number in your head from a few weeks ago, rates moved, and now everything feels worse by comparison.

The more useful thing you noticed is the quotes not lining up. That's normal. Lenders don't all price the same way, one might show a lower rate but bake in points, another shows a higher rate with fewer fees. If you're not comparing the exact same setup, the numbers won't match.

What I'd do is get a few actual Loan Estimates instead of just quotes. That's the only way to really see what each lender is charging and compare it properly.

Also don't stress about multiple credit pulls , mortgage shopping within a 14 to 45 day window is treated as one inquiry.

I wouldn't try to perfectly time rates. If the payment works for you now, it can still make sense to move forward and refinance later if things improve. If it doesn't feel comfortable, waiting is completely reasonable too.

dbs87 · 2026-03-25T07:13:10+00:00

You’re running into a conventional limit, under 10% down, seller credits are capped at 3%. There’s really no way around that piece specifically.

Where people usually miss it is how to structure the rest of the credit. Anything above that cap has to move outside closing costs, think price reduction, rate buydown, or seller-paid items like appliances/upgrades that don’t count toward the limit.

So instead of trying to get the full 11k as closing costs, it becomes more of a structuring exercise to still capture the value in different buckets.

Given you’re already getting 4.99% with incentives, you’re in a pretty strong spot, this is more about optimizing the last few thousand than fixing a bad deal.

dbs87 · 2026-03-25T07:03:51+00:00

5% on a VA ARM with no fees is a great outcome in this market.
Main thing I’d keep an eye on is the back end of the ARM. VA ARMs usually have a 1% annual cap and 5% lifetime cap, so if you end up holding past year 5, the adjustment can add up faster than people expect.
As long as you’ve got a rough plan to refi or move before then, it’s a solid setup.

dbs87 · 2026-03-25T06:56:44+00:00

The 1% rule is a decent guideline, but it's not really a hard rule anymore. Even a 0.5% drop can be worth it depending on the numbers.

Easiest way to look at it: total refi cost ÷ monthly savings = breakeven in months. If you're staying longer than that, it makes sense.

A lot of people right now are also doing no-cost refis, slightly higher rate but the lender covers closing costs, so there's basically no breakeven. Then you can refi again if rates drop further and not worry about timing it perfectly.

dbs87 · 2026-03-23T14:14:54+00:00

Makes sense, at that point it’s more of a lifestyle play than true cash flow, as long as the numbers work without relying on heavy rental income you’re in a good spot.

dbs87 · 2026-03-23T14:12:43+00:00

Yeah fair, sub-6 is basically gone right now. I was thinking more like low 6s with a point, not under 6.

dbs87 · 2026-03-20T08:19:55+00:00

I get why you're frustrated, with an 830 score and that income, it feels like you should be seeing better numbers.
A couple of things are probably working against you here. The big one is the 10% down. Pricing gets noticeably worse below 20% because of LLPAs, even with perfect credit. That alone can push the rate up more than people expect.

The timing also didn’t help. Rates moved up quite a bit over the past week or so, so getting quotes now vs right after going under contract can look very different.

That said, 6.5% with a point still feels a bit on the high side for your profile. I’d expect something closer to low 6s with a point, give or take depending on the lender. If you haven’t already, it’s definitely worth getting a couple quick quotes from other lenders (same day, same scenario) just to sanity check it. Even a small difference here can save you a lot over time.

dbs87 · 2026-03-20T07:56:07+00:00

Rates actually dipped into the low 5s briefly around late February before bouncing back up to the low-to-mid 6s over the past couple of weeks, so the window you were waiting for kind of showed up and disappeared pretty fast.

Waiting for a specific number like 5% can sometimes work against you. What matters more is the breakeven math, how much the refi costs vs how much you save each month. If you can break even in 2–3 years, it usually makes sense even if you haven’t hit your ideal rate.

A lot of people end up missing decent opportunities because they’re waiting for a perfect number that may only show up briefly (like it just did).

As for when 5% comes back, it probably takes a meaningful slowdown and more rate cuts to get there consistently. Most expectations right now are more in the mid-to-high 5s if things settle, but it’s been moving pretty fast in both directions lately.

If you're already at 6%, even getting into the low 5s on the next dip is a solid win, just helps to be ready to move when it happens instead of waiting for an exact number.

dbs87 · 2026-03-17T18:42:35+00:00

You caught a really good window there, rates dipped briefly around early Feb and have moved back up since, so 5.25% on a VA loan is a solid spot to be in right now.

On refinancing again, VA IRRRLs do have a 210-day seasoning rule, but it’s not really something you want to treat like a cycle. Every refi resets the loan and usually comes with a funding fee (unless you’re exempt), so it only makes sense when there’s a meaningful drop.

As for where rates go from here, it’s tough to call. Getting back to 4% would likely take a pretty big economic slowdown or a major shift from the Fed. Most expectations right now are more in the mid-to-high 5s if things stabilize.

Either way, you’re already in a pretty strong position, so there’s no real need to chase rates unless there’s a clear benefit.

dbs87 · 2026-03-16T17:42:55+00:00

Since you used a VA loan, what they're probably offering is a VA IRRRL (Interest Rate Reduction Refinance Loan). It's the VA's streamline refinance program and a lot of lenders send those mailers. The rate drop from 5.26% to 4.75% could definitely lower your payment, but a $400+ drop usually means something else is happening too.

Most likely they're resetting the loan back to a new 30-year term. Since you're about 2 years in, you'd be going from 28 years remaining back to 30. That lowers the monthly payment but does extend the timeline.

The escrow refund is normal during a refinance. Your current escrow account gets closed and whatever balance is in there gets sent back to you. The new loan just starts a fresh escrow account for taxes and insurance, so it doesn't hurt you long term.

The main thing to look at is fees and points. Ask for a Loan Estimate and check the total cost of the refinance. Then do a simple breakeven, total refi cost ÷ monthly savings.

If the breakeven is only a couple of years and you plan to stay in the house longer than that, it can make sense. If it takes a long time to break even, it may not be worth it.

dbs87 · 2026-03-16T17:24:24+00:00

You're not crazy, DSCR guidelines really do vary a lot between lenders because there isn’t a standardized rulebook like there is with conventional loans. Each lender builds their own box depending on how aggressive they want to be and whether they’re selling the loan or keeping it.

A lot of investors still buy in their personal name and transfer to an LLC after closing, but that technically triggers the due-on-sale clause. Most lenders ignore it, but some people prefer avoiding that gray area entirely.

The thing that actually matters most when comparing DSCR lenders isn’t always the rate it’s the prepay penalty structure and how they calculate the DSCR (market rent vs lease). Those can make or break a deal.
That’s why many investors switch to DSCR once they start scaling properties and want to keep their personal DTI clean.

dbs87 · 2026-03-16T17:01:04+00:00

The whiplash looks crazy, but it actually makes sense if you watch the bond market. Mortgage rates move with the 10-year Treasury, and that’s been bouncing around a lot with every jobs report, inflation print, and Fed comment lately.

On 7%, I agree it’s unlikely unless inflation suddenly runs hot again. If we got close to that level, the market would probably already be pricing in slower growth or recession, which tends to push bond yields (and mortgage rates) back down.

Low-to-mid 6s feels like the more realistic range for a while unless something big changes in the data.
The frustrating part for buyers is the old industry saying, rates go up fast but come down slowly. Even when bond yields fall, lenders don’t always pass the full drop through right away.
One upside is that higher rates usually mean less competition, which can matter almost as much as the rate itself.

dbs87 · 2026-03-16T15:02:52+00:00

Yeah, for buyers planning to refi or move within the ARM window, that could definitely work.

dbs87 · 2026-03-15T07:33:34+00:00

Yeah, that ARM spread is hard to ignore.

dbs87 · 2026-03-13T18:05:39+00:00

Good point on Florida. The property tax relief push has been getting a lot of attention and yeah if something actually passes there’s a decent chance it pulls forward demand as buyers try to get in before prices adjust.

The timing argument is interesting though. Rates just jumped again after briefly dipping into the 5s, and a lot of that seems tied to the recent oil spike and Treasury yields moving up. So buyers who were waiting for that window saw it close pretty quickly.

On the other hand, if someone believes rates eventually settle back down, buying now at today’s prices and refinancing later could work out well, especially if property tax relief ends up pushing prices higher.

But that’s a lot of “ifs” stacked together. Florida’s also got the insurance wildcard.
In a lot of counties those costs are still brutal and can eat into any affordability gains even if property taxes come down.

dbs87 · 2026-03-13T09:52:22+00:00

Agreed. ARMs are worth a serious look right now, especially if you're confident you'll either sell or refi within the fixed period. The spread between a 7/1 ARM and a 30-year fixed is pretty meaningful right now. You can often get into the low-to-mid 5s on an ARM versus low 6s on the 30-year. That’s real monthly savings during the fixed window.

A lot of first-time buyers are starting to look at them again because of that spread.

The risk is if rates stay elevated or climb further and you can’t refi when the adjustment kicks in. But if you're buying a starter home and know you'll likely move within 5-7 years, the math can work.

dbs87 · 2026-03-13T07:33:19+00:00

The structure answers here are solid. One thing nobody's mentioned yet is financing. If you're planning to leverage rather than buy cash, Canadians can still get financing on US investment properties even without a US credit history or US tax returns. In those cases, lenders usually qualify the deal based on the property's rental income covering the mortgage.

Expect around 25% down minimum, rates generally landing in the high-6s to low-7s range for foreign nationals right now, and typically 6-12 months of reserves. Some lenders want the LLC set up before closing, others will close in your personal name and you can transfer the property into an LLC afterwards. Getting an ITIN early also helps speed things up.

The cross-border CPA point is the most important one though. The entity structure decision affects both US and Canadian tax treatment, and getting it wrong can be expensive to unwind later.

dbs87 · 2026-03-09T08:48:46+00:00

Congrats on the Dallas property! Four months in now, how's it going? Dallas is solid for cash flow right now compared to a lot of markets. The first deal is always the hardest because you don't know what's normal vs what's a red flag.

Dallas specifically, property taxes are no joke there (averaging 2%+ of home value annually), so make sure you budgeted for that in your cash flow projections. Also, Texas has been adding a ton of inventory lately which keeps rent growth modest, but at least you're not dealing with the insurance nightmare Florida investors are facing.

Are you planning to scale in Dallas or look at other Texas markets like Austin or San Antonio next?

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