Originally Posted by BritGuyTN

i have a fully adjustable mortgage in the UK and an ARM in the USA, i however am not shitting myself like nearly all the americans I know do when you mention the term 'ARM'

seriously, last night at dinner a friend asked me for ideas and I laid the various options on the table, immediately her friends were 'ooooh' don;t get an ARM, they're really bad....... My response was, well the house you are about to sell, you've lived in for three years and instead of getting a ARM for 3/5 years and paying 3.5-4.5% (at the time), you've paid 6.5% - nearly 50% more interest. They didn't quite get the jist

regarding your 50 yeay old friends - I feel very sorry for them, either they were bamboozled by an unscrupulous mortgage officer or they really are very confused

Originally Posted by nun

I think the most important thing in choosing a mortgage is to estimate how long you'll be in the house. If its 4 or 5 years an ARM is quite good as you wouldn't expect interest rates to increase enough wipe out the discount they give you. For the longer term, and with the recent historically low interest rates, I like the fixed rate mortgage as you can know exactly what your expenses will be and you can budget accordingly. When I saw that I could get a 15 year fixed at 4.5% I went for it as I planned to be in the house for at least 10 years and I couldn't imaging interest rates going much lower.