Re: Do NOT get an ARM and you\'ll be fine nt
Nate, you seem to be confusing 1 or 2 year ARMs w/ 5/7 year ARMs.
It does you no good to pay 2pts per year to have the guarantee of having a low interest rate if you stay in the home for 15-30 years and never refi.
I bought my condo a year ago. I have a 5 year ARM at 4%. I could have got a 30 yr fixed at the same time of around 6%. Think about what rates would have to go to, and stay there, and how long I would have to stay in the home w/out refinancing for the 30yr fixed option to be better. (not even counting the fact that I'll be swimming in money a la Scrooge McDuck in 5 years after I win the WSOP)
Straight ARMs and 1 or 3 year ARMs can be scary (especially if they were subprime to begin with), but 5 and 7 year ARMs are a fine option for people in my situation.
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