4.99% ARM or 30 Year Fixed

Hello, for the loan amount of $809k on a $1.079m house on new construction, the builder is offering 2 options:

  1. 4.99% for 30 year fixed
  2. 4.99% 5 years ARM + closing costs ($13k) + 5 months HOA ($2k)

Which option should I select? I’m not sure how long we would be staying in this house. What makes the most sense?

Where the hell are you getting 4.99%???

Zee said:
Where the hell are you getting 4.99%???

It’s a builder incentive on new construction, and they have already inflated the house price.

Zee said:
Where the hell are you getting 4.99%???

New constructions always have favorable rates.

Based on the last 2 weeks, I would avoid an ARM. Several economies are becoming very uncertain. Expect higher building materials and labor costs for the foreseeable future. Good luck.

For me, option 1, by a long way.

In my opinion, fixed is always less risky, especially in the US. You never know which way the rates are going to go.

Fixed. If it was a 10-year ARM, then maybe that, but go with fixed to keep your mind at ease.