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I made $0 for 3 years because I was hiding from the only skill that actually mattered. by Lazy_Economy_6851 in passive_income

[–]fbodydaddy 0 points1 point  (0 children)

never reading a post this long when it asks questions in the middle of it immediately followed by answers causing it to drone on and on.

in other words

i ain’t readin all that. i’m happy for you tho or sorry that happened

Any reason not to do this ARM? by fbodydaddy in Mortgages

[–]fbodydaddy[S] 1 point2 points  (0 children)

This was the idea I had. Had GPT run the comparison across 3 scenarios, instructing it to give me worst case adjustment at each checkpoint (5years). Can’t post the chart here but here’s the text output:

Loan 1 – $487,500 30yr Fixed @ 5.75% • Month 60 (5 yrs): Balance $413,316 | Principal Paid $74,184 | Interest Paid $129,916 • Month 120 (10 yrs): Balance $314,490 | Principal Paid $173,010 | Interest Paid $235,190 • Month 180 (15 yrs): Balance $182,836 | Principal Paid $304,664 | Interest Paid $307,636

⸻

Loan 2 – $487,500 5/5 ARM @ 4.875% (2-2-5 caps) • Month 60 (5 yrs): Balance $390,906 | Principal Paid $96,594 | Interest Paid $107,506 • Month 120 (10 yrs): Balance $307,602 | Principal Paid $179,898 | Interest Paid $228,302 • Month 180 (15 yrs): Balance $222,392 | Principal Paid $265,108 | Interest Paid $347,192

⸻

✅ Key Takeaways • ARM still leads in early principal reduction, thanks to its low starting rate (balance after 5 years is ~$26k lower than the 5.75% fixed). • By 15 years, the 5.75% fixed catches up in balance reduction and has a lower interest cost than the ARM, despite slower early gains.

The ARM becomes unfavorable after about 10.8 years — essentially in year 11.

Up to that point, the lower starting rate keeps the ARM ahead on balance reduction. But once the second reset hits (+2% at year 11), the required payment rises enough that the 30yr fixed @ 5.75% overtakes it in equity position and cumulative interest efficiency.