Refinance with PenFed 5/5 ARM?

[lostinlala2]

I feel like I'm crazy considering an ARM but it might just make sense???

We bought our house 14 months ago for 250K owe 235k as of today. Appraisal from purchase was 280k but this years tax assessment 250k.Wish they'd use our old appraisal but know thew won't...this is my main concern. Can only borrow 90% of value

Our current monthly payment is 1600 but we pay 2000 every month and plan to continue paying that amt.

PenFed is offering no closing and 3.65% as of today. This would make our payment something like 1150 p/month for the first 5 years (allowing us to pay total of $850 extra p/month). If appraisal not high enough or don't close for any other reason...out appraisal fee + $65 credit check (and any other fees they claim to have incurred).

We already are members and have refi'd auto and have promise card.

Our dti is about 30%. Scores in 750 range.

Is this a good idea?

[ShanetheMortgageMan]

With relying on an appraised value it's tough, as those can come in all over the place.  It'd be good if you can find other experiences with PenFed's appraisal process, to find out if others have said they are conservative or if things usually go as needed.  But basically it's going to be about $450-500 to put down on the table for a payoff off of $27k over a 5-year period, I think most people in Vegas would take those odds... perhaps you should have a few drinks playing Texas Hold'em before making up your mind ;-)   You can do some research prior to by putting together comparables with your real estate agent who helped you buy the home, in what is called a "comparitive market analysis" and perhaps even provide it to them so they can compare it to the appraisal data that they get (not sure if PenFed's mortgage division would offer that level of customer service but it's worth a shot).

[lostinlala2]

Thanks. I just wanted to make sure I wasn't making it too good to be true. I contacted BOA who currently holds our mortgage to see if they could make a similar offer...and maybe use the appraisal we already have. LO is going to send me some numbers today. He kept skirting the appraisal bit but did at one point mention if we still payed pmi the old appraisal could be used. That was kind of under breath so we'll see... Doubt they have a 5/5 but might have a 10/1 that would have same results.

I must enjoy the stress