What is better, an ARM or a fixed rate mortgage?

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What is better, an ARM or a fixed rate mortgage?

depends what your needs are, arms are good if you feel extremely confident that you can sell your house if thats what your plans are, overall fixed is best really thou.. gl

What is better, an ARM or a fixed rate mortgage?

Claudio, I would strongly recommend getting into a fixed rate mortgage. That resetting ARM will, more than likely, keep resetting higher and higher.

What mortgage will have paid the total amount in 20 years? Whatever interest rate was lower, which generally means a fixed rate over the long haul.

Also, if you only have 20 years left on the mortgage, you're in a great spot to get a great 20yr. rate.

Good Luck

What is better, an ARM or a fixed rate mortgage?

There is no easy answer to your question, unfortunately. It all depends on the economy. Four to five years ago, you could get an ARM that was fixed for a certain period, let's say five years, then it would adjust after that. The rate on that program was on average two percent less than the 30-year fixed. So if you were only going to be in your home for the next 4 years, and you were fixed in for 5 years at 2% below where you would be with a fixed loan, you saved thousands of dollars in interest. The thing is, that back then short-term money was less expensive than long-term, i.e. the rates on the ARM loans were much less than long-term loans like a 30-year fixed. Nowadays, we have what's called an "inverted yield-curve" meaning that short-term money is just as expensive, if not more expensive than long-term money. So the rates on the ARM's now aren't any lower than the 30-year fixed, so in this market it makes no sense to take an ARM when you can get the same rate on a fixed.

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What is better, an ARM or a fixed rate mortgage?

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