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ARM loans....

We are getting ready to transfer to a different duty station and are planning on buying a house. We sole ours so we are good to go in that aspect. We automatically have been looking at conventional loans. My husband threw out there the possibility of an ARM loan instead. We know the max amount of time that we will be at that station is 3 years so while we own the house it would never change and we would get a considerably lower interest rate which would help us out on payments in the higher price of living area. What do you ladies think? We are both very hesitant but in our heads it makes sense.

 
Anonymous

Asked by Anonymous at 7:14 PM on Jan. 31, 2011 in Money & Work

This question is closed.
Answers (8)
  • I think doing an ARM in your situation is a good idea. I would look at doing a 5 year just in case you are there longer or it is harder to sell that way you don't have to worry about the rate going up too early. If something would change you could always fix in your rate before the 5 year timeframe.
    Kari126

    Answer by Kari126 at 7:49 PM on Jan. 31, 2011

  • Interest rates are already low. Where do you think they are going to go if you get an adjustable rate mortgage?
    I'm just saying if you do buy, I'd lock in t he rate. No one's plans for the future are ever set in stone. So much could happen. And with rates at about 4% it's worth it to lock in. I know it's not the 3% that it was a few months ago, but it's still super low. If you get an ARM loan it's practically guaranteed to go up which would increase your payment dramatically.
    Erica_Smerica

    Answer by Erica_Smerica at 10:44 PM on Jan. 31, 2011

  • The only time I have ever heard them recommended is when you are absolutely sure you will sell the house before the rate goes up. There are all sorts of things that can happen to change the time you stay in the house. But can an ARM be refinanced if you do stay in the home longer? IDK GL!!
    elizabr

    Answer by elizabr at 7:17 PM on Jan. 31, 2011

  • We know that we will not stay in that area any longer than 3 1/2 years. My husband will transfer back to a sea duty and since it is in New York it will have to be somewhere else. That is one thing that you can count on with the military.
    Anonymous

    Comment by Anonymous (original poster) at 7:20 PM on Jan. 31, 2011

  • Why buy if you are only going to be there 3 years? That does not make economic sense, esp. in this real estate market.
    tasches

    Answer by tasches at 7:22 PM on Jan. 31, 2011

  • We have 4 little ones the biggest houses they have on base are 900 square feet which is not big enough for our family of 6. Renting options are much more expensive than buying our own house and we hate renting.
    Anonymous

    Comment by Anonymous (original poster) at 7:25 PM on Jan. 31, 2011

  • I wouldn't do it. ARM is part of the reason our economy is in the toilet right now and a lot people lost their homes because they couldn't pay when the rates went up. Not a good idea.
    Christina807

    Answer by Christina807 at 11:07 PM on Jan. 31, 2011

  • But have you added in RE fees into what is more afforedable, renting or owning?
    I wouldn't do it. I know many a miltary families that cant' sell their houses right now, yet they had to move.
    Candi1024

    Answer by Candi1024 at 11:57 AM on Feb. 1, 2011