[Justa]

ARMs allow people to purchase when they don't have a leg to stand on.

[Hazcat]

ARMs allow people to purchase when they don't have a leg to stand on.

Rim Shot !

[Phantom Lord]

ARMs allow people to purchase when they don't have a leg to stand on.Sometimes. But they are also a very powerful tool to save a ton of money on the purchase of your home.

My case being a perfect scenario.

When I bought my home in 1999, a 30 year fixed was 7.25%. I got a 1 year ARM at 5.25%. Worst case scenario in a year it would go to 7.25%. But it didn't. It dropped in 2000. It dropped again in 2001. And again in 2002. And again in 2003. But in 2003 I was able to refi to an even lower rate of 3% for a 3/1 ARM. And it was known that I would be in a new home before sometime during the last year of the 3 year fixed period.

So, should I have gone with the 7.25% fixed, or did I make the right move with the ARM?

I hope the answer is obvious.