What is an A.R.M. and why do you think it’s for me?  An A.R.M. is an Adjustable Rate Mortgage which means that after a certain period of time usually a couple years or so the rate will adjust, the amount varies (usually 1%), and while there may be some instances that they are a good idea. Some A.R.M.s will adjust annually after the first time and you could find yourself with a higher rate than a standard Fixed Rate mortgage.  Some mortgage companies will push an A.R.M. and make it sound like a really good deal, in the long run however I believe that you will pay more. Given the low rates that are out here now, I don’t feel that it is really worth it.  Because, you don’t really want the rate to adjust. I suppose it can be fine for the short term but what if you cannot sell the house like you want in three or four years.  An A.R.M. usually adjusts by the 4th or 5th year.  If you want to refinance, do you have enough equity in the house to not have to come out of pocket for the closing costs that you need to pay for a refi?  If you don’t have enough equity, then do you have the cash to pay your closing costs?  In the market here in Jacksonville NC the majority of our buyers and sellers are military and move every 3-4 years, that really does not lend itself to taking on an A.R.M.  As long as your credit is good, you have good payment history you should be able to qualify for a mortgage at the going rate for mortgages.  Get the Fixed Rate mortgage and save yourself the trauma and drama of wondering what your mortgage payment will be when it adjusts.  Isn’t there enough stress in life already, why add more if you don’t have to?  Make sure you do your homework before you decide to finance your home using an A.R.M.

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Ellen Hough, Jacksonville NC Real Estate , specializing in guiding home buyers and sellers through the home buying and selling process.   Working at EXIT Independence Realty, call or text me @ 910-330-6103 (Cell)