Hi all,

Well here my situation.....I'm a first time home buyer and currently applying for a home loan thought BOA.  I'm a U.S. military active duty Marine and will be using my VA benefit's for this loan.  As of now, I'm applying for a 30 year ARM VA 5/1 1-5 loan at 4.375 and wanted to know if I'm getting a solid deal.  The total cost to the home is $326,000 and total monthly payments w/taxes/HOA etc...will be $2,100 fixed for the next 5 years.  As I read earlier....once it's time for the loan to adjust....it can only adjust 1% a year and the max is a total of 5%?  I'm new at this and wanted to learn/know what I'm getting into.  I have about 7 years left before retirement (20 yrs of service) and the military pay's me $2200 a month for off base housing, so I'm thinking that in 5 years from now went this rate (4.375%) adjust by 1% (5.375%) it will not affect me as much (maybe a $100 or so extra), right????  Somebody help me on this one! 

Your payment will adjust about $171 per month if it takes the full adjustment in 5 years.  Ask them to give you an amortization schedule assuming a worst case scenario so that you can see what the payment could adjust to over 10 years.  Because each year it can move a full percent. 

Mr. Bledsoe,

Thanks for the advice!!