Mortgage geeking

[magid]

I'm going to be starting the 9th year of a 5-and-1 ARM (adjustable rate mortgage; the payment stays the same for the first 5 years, then fluctuates each year, depending on the current rates). Last year, my payment dropped, and the rate was lower than I could refinance into (staying with the local bank who bought my mortgage initially, which I would like to do, since they've been a good, organized lien-holder, and they're local, so if I want to, I can walk my payment over). So I kept the mortgage and tried to pay it down as much as possible. I figured I could check again before my payment changed, and refinance then. (I'm still not sure if I feel stupid or not for not refinancing at the end of the first 5 years, to lock in a fixed lower rate. It's what I always assumed I'd do, and let it slide, and then the payments kept dropping... But conventional wisdom always has one refinancing before the variable part starts.)

I got my notice from the bank about next year's rate and payments. Another decrease, to 4%! Shock and amazement! I'm going to call the bank, but if it's like last year, I won't be able to get this rate if I refinance with them, so I'll end up taking another year of massively paying down the mortgage (well, as much as I can. Heck, these days, 4% even looks like a good return on an investment!). I'm still really surprised by it all; my monthly payment is dropping about $100. Which doesn't mean I'll be sending them any less, just that more will go towards paying down the mortgage, and less towards interest.

This is not how I expected mortgages to be, somehow. I think my parents always had a fixed rate mortgage, so it was just another payment, month after month after month... but this feels a bit more exciting, watching the numbers change (kind of like that round-numbers-on-the-odometer thrill. Hrm. Or does anyone else find that interesting at all?), wondering how soon I can get past another milestone number on the principal.

Comments

[pinkfish.livejournal.com]

Dropping mortgage rates are exciting in the same way that rising stock prices are exciting.

When I talk to folks who had ARMs during the Carter years, "exciting" is not the word they use for them.

[magid.livejournal.com]

I can imagine it's not nearly so much fun when the rates are rising (of course, then stock prices might be rising too, so it would balance out the excitement, I suppose). I was lucky in my timing, all around; I know that my downstairs neighbor spent much more than me, and had a higher rate for some time, too.

I'm still nervous that thins will turn around quickly and I'll be too slow, and miss an opportunity I'll kick myself about later...