If you want to keep the house for a long time, I would go with loan#1. You always have the opportunity to do no cost refinance, so I would not want to pay more to reduce the rate.
Or, get a lower rate with the ARM.
• agree. Low closing cost, or zero upfront is always good -sunskitehomes- ♂ (328 bytes) () 01/05/2010 postreply 07:14:59