ARM loans

[Tclark828]

I was told by 2 different lenders that they (and noone else) are offering ARMs at this time. Because of the bond rates the loan would be underwater so the amount of upfront fees would be too high. Is this accurate or am I being mislead? I still see them advertised all over. I'm located in NJ. Thanks!

[Mortgage-Specialist]

Although many ARMs are underwater with many lenders, some lenders do offer it - just need to do a little research. The rate seems to be just a half point or so less so I'm not quite sure it's worth the risk. In previous years ARMs tended to have a better incentive 

[MortgageMama]

ARM's are indeed available from lenders, not sure why that lender would claim exclusive rights to that product. One needs only to do a quick internet search to find them. That said, we are now going back in time to what used to be one of a loan officer's first questions - "How long do you plan to stay in the home?"  ARM's can be a good alternative if you select one that carries you through the length of time you intend to stay. For example, if you know there will be a change in your living situation/life in 5 years, you could select a 7 year ARM. That would give you some flex time before the interest rate adjusts. With fixed rates at current levels, you could get an ARM at a significantly lower rate. 

[Tclark828]

  According to the lender I spoke with today, the ARM rate wasn't much different than a fixed rate. A 7 year ARM with 2 points would be 6.375 and he said i could get a fixed rate @ 7% with 0 points

[MortgageMama]

Do yourself a favor and conduct an internet search. I am NOT promoting them one bit, but if you search US Bank Current Mortgage Rates, you will at least see theirs. They don't match up with what you are being told about ARM rates. There are other site that will provide a collection of lenders, but I don't recommend those. My point here is that the quote seems way off. The devil is always in the details, i.e. rate vs. points. You may need to shop around a bit more.

[compassion101]

Not everyone will offer ar ARM, but many will. I wouldn't hesitate to take an ARM right now as long as you are saving at least half a percent, as I'm confident that rates will be lower at some point over the next 7 years (hopefully 3 years) than they are now. I'm willing to take the risk that they may not be. Taking an ARM is mostly about your risk tolerance and assesment of current rates compared to future rates.