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i am considering an ARM because we don't plan to be in the house forever, most likely 3-5 years. 5/1 conforming arm rates are ridiculously low and I think will work for our situation. I may be relocated for work and then my company would cover the sale costs again. Can someone give me the cons side of the story? Other than being in the house longer than the arm? What should I worry about?
@BeingMaryJane wrote:i am considering an ARM because we don't plan to be in the house forever, most likely 3-5 years. 5/1 conforming arm rates are ridiculously low and I think will work for our situation. I may be relocated for work and then my company would cover the sale costs again. Can someone give me the cons side of the story? Other than being in the house longer than the arm? What should I worry about?
Arms are not that bad if you understand all the terms and conditions. What you want to know is the margin and the index and any annual caps and lifetime caps on the loan because if you sign for an arm and expect to move in 5 years sometimes you don't move within your original timeframe.
An ARM is not a "bad" product but it is not the right product for every scenario. Many people got into trouble thinkingthat they'd refinance when the fixed-term portion of the ARM arrives ... only to discover that they are unable to refinance. Sounds like it will work well for your scenario.
they never were bad. still a great loan.