The ARM is a gamble, but I think some more details may make it look better. It's a first time homeowner's loan through a very stable credit union. We started at 4.75%, and the rate can go up or down no more than 1% every other year. It cannot raise more than 8% over the life of the loan. This loan enabled us to put less down (keeping our EF steady), avoid PMI, and have much lower closing costs than we would have with other lenders. We're looking at incresases (or decreases, if we're lucky) in 2011, 2013, 2015, etc. However, we're only planning on being in this house for 5-7 yrs so the most it can increase is 2-3%.
My income is about 55% and his is about 45% of the total. We're very serious about saving for retirement and were only considering putting it off a year because we could immediately max out an IRA for him early in the year. Is it better to calculate percentage of retirement savings based on pre or post tax salary? Or does it depend on the type of account?
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