Adjustable Rate Mortgages - Property Investment and New Homes For Sale Forum

mandiees · #1 (**permalink**) 19th July 2008, 06:39 PM

Are these a definite no-no in today's market? What kind of rate hikes should one expect if they do decide to go with an ARM loan?

matthewristel · #2 (**permalink**) 21st July 2008, 12:51 PM

I think there is much complexion to provide the answer of this question because each and every people have own way to decide to go with ARM Loan.

EugenS · #3 (**permalink**) 22nd July 2008, 12:21 PM

I'd say it's a big no - no. Because the bank will probably screw you up, "adjusting" the rate so that they win big. But do your research, and see if that suits you. If you can take it, go for it. If not, stay away.

jspringer4 · #4 (**permalink**) 22nd July 2008, 09:25 PM

Even when the market was good, I would have called an ARM a huge gamble. Basically you're betting the interest rate will stay low, and when it doesn't, you're in for some big trouble. I would stay away from them!

mandiees · #5 (**permalink**) 22nd July 2008, 11:52 PM

Thanks for the advice, sounds to me as though it is just one of those "teaser" rates to get people into the house and then screw them once they start making payments. I bet most of the unfortunate people losing their homes during the foreclosure crisis had this type of loan.

Pandora · #6 (**permalink**) 23rd July 2008, 05:30 AM

I have never been a fan of adjustable rates. I think that it is a much better bet to get a fixed rate that you know you can afford, than to gamble on what can happen in the future with an adjustable.

shruti · #7 (**permalink**) 23rd July 2008, 05:10 PM

It is very complex.

mandiees · #8 (**permalink**) 24th July 2008, 12:03 AM

Quote:

Originally Posted by Pandora

I have never been a fan of adjustable rates. I think that it is a much better bet to get a fixed rate that you know you can afford, than to gamble on what can happen in the future with an adjustable.

Yeah, that sounds like sound advice in this situation. With the market the way it has been it just seems anything that is not set in stone is eventually going to come and bite you in the butt!

elvenrunelord · #9 (**permalink**) 24th July 2008, 08:02 AM

Its a huge no no. These ARM's are what caused part of the problem we have today...well that and fraud. Congress is getting ready to pass legislation that will allow 450,000 home owners to refinance with better terms.

Lissy · #10 (**permalink**) 2nd August 2008, 05:20 AM

Quote:

Originally Posted by jspringer4

Even when the market was good, I would have called an ARM a huge gamble. Basically you're betting the interest rate will stay low, and when it doesn't, you're in for some big trouble.

I agree, it is pretty much a gamble. They try to entice you with a good low rate, but you know the rate can change. You *hope* that it will not... or maybe that it will be lowered even more... but what happens is usually the opposite.