Adjustable rate mortgages or ARMs are a different kind of mortgage than the standard 15 year or 30 year loans available at your local credit union.
ARMs have a lot of negative stigmas attached to them, but are there situations where using an adjustable rate mortgage is a wise financial move?
Pros and Cons to Having an Adjustable Rate Mortgage
Before you jump onto the adjustable rate mortgage train, consider the following:
What is an Adjustable Rate Mortgage?
Most of the mortgages now available post-financial crisis are less risky investments for the lenders.
Gone are the days of getting a mortgage without income documentation. The most common loans are 30-year fixed loans and 15-year fixed loans. Fixed rate loans give stability to the payment for the borrower. Your mortgage is $800 today, $800 tomorrow, and $800 10 years from now. The stability in the payment makes it a lot easier to plan for your financial needs for years to come.