[vreihen16]

When we bought our house (before the bubble popped), the mortgage company would only approve us for a 30-year 5/1 ARM even though I wanted a 15-year fixed. Their ARM was written with no anticipation that there could be a bubble pop, so they had no floor on downward moves and a 0.5% cap on raises. I was paying it on a 20-year pace.

The bubble popped a few months before the first adjustment, and because of the key fund they based the adjustment on, our interest went down from 4.25% to 0.25%! Even better, with the 0.5% cap on yearly increases they couldn't even get it back up to 3.25% for another six years even if the interest rate shot to 20% overnight! Long story short, we had three years of < 0.50% interest before the mortgage company decided to sell our money-losing mortgage to a slimy company that specialized in bankrupting/foreclosing on people with bad credit.

Having an 800+ credit score, we went to our local credit union and closed on the 15-year that I originally wanted as a re-fi at 2.65% in less than 48 hours. I'm paying it at a 10-year pace, and with any luck it will be paid off in five years...just in time for my early retirement to start.....