Should I refinance into a 7 year ARM?

I am contemplating refinancing from a 30 year fixed loan at 5% to a 7 year ARM at 3.75%. I owe approx $189K, have a current payment of $1055 per month and the house appraised two months ago for $270k. Closing costs would be around $1,100 and the new payment would be around $878.00 per month saving approx $178/ month. I don't like the future risk on interest rates, but I could certainly pay down the loan faster this way. It's no shocker that loan guy is saying I should pull the trigger.Professional thoughts?Thanks!! by jvermig1_689_650 from Macomb, Michigan. Aug 9th 2011 Reply