"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
"Any one asking for an ARM is a fool. That's the way to certain foreclosure. An ARM makes sense if you have a steady income and you intend to live in a home only a few years. But if this your home for life, a traditional 30 year fixed is always the safer option. I suspect if they had taken a 30 year fixed, they wouldn't be facing foreclosure now."
Depending on the research you read, the average American lives in their home 7 yrs and in their mortgage 5 years. For those that aren't living in their "forever" home, ARMS can make a lot of sense. The issue isn't the type of loan, it's the loan amount, lack of down payment, living beyond their means.
hubby and I bought our starter home three years ago this month. Boy did they try everything to get us to avoid the very traditional loan I insisted on. We bought a smaller how than we would have liked, but when hubby was unemployed we could still comfortably make our mortgage payments.
We thought we would sell by this time, but turns out we're just fine where we are, and don't have the pressure of an ARM bearing down on us. I still want a bigger house, but we will do it when we can afford it through thick and thin.
The loan officer told me at the time that we were one of the cleanest loan applications he had seen in a while. Thirty years, 20% down and no prepayment penalty.
Certain foreclosure? All ARMs end in foreclosure?