Rich Habits Podcast

Q&A: My Dad Gifted Me A House, Closing Credit Cards, & Mortgage Worries

Oct 2, 2025
This episode dives into the intricacies of adjustable-rate mortgages and 2-1 buy downs, providing clarity on their benefits and drawbacks. The hosts weigh in on whether to sell or keep a mortgage-free home in retirement, emphasizing smart financial strategies like the 4% rule. Listeners learn the importance of keeping unused credit cards for credit scores and the advantages of buying a discounted family house as a rental. Key insights on balancing retirement savings with travel plans offer practical advice for financial management.
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ADVICE

Use ARM + 2-1 Buydown To Boost Buying Power

  • Consider an ARM with a 2-1 buydown to increase buying power now and lower initial payments.
  • Refinance to a 30-year fixed when rates fall within the next 2–3 years to lock a stable payment.
INSIGHT

How ARMs Track Market Rates

  • ARMs track the 10-year yield, so payments rise and fall as yields move.
  • ARMs usually start cheaper than fixed rates, creating short-term affordability but with interest-rate risk later.
ADVICE

Plan To Refinance During The Buydown Window

  • If you take an ARM with a buydown, plan to refinance to a fixed-rate mortgage within the buydown window.
  • Treat the buydown years as a runway to refinance when market rates improve.
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