What is better now days an adjustable rate mortgage or a fixed rate?

Question

What is better now days an adjustable rate mortgage or a fixed rate?

Answer 1

Fixed, in the vast majority of circumstances.

Answer 2

It really depends on what your long term goals are. If you're talking rates, they're nearly the same these days. The average person moves every 5-7 years. If they think they'll move and rates are lower on a 5 year ARM, I'd say go with the ARM. If they really plan on staying in their home long term, I'd go with a fixed on a 15, 20, 30 year term.

Answer 3

i say, fixed. i don't want some bank charging me whatever they feel like just because they are losing money on other business they do.

Answer 4

Of course fixed!!! You dont want to be foreclosed on. Thats what happened to everyone they had an ARM and the payments skyrocketed and they lost their house. Always fixed!!!!

Answer 5

1st off the person who is talking about the Fed has no clue. The Fed only affects HELOCS becuase those are based on the short term rates....

Right now in the market there's 2 things you have to look at....

1) will you definetaly be in the house less then 5 years?

2) what is the difference in payment between the 5 year ARM and the 30 fixed..

Is the payment difference big or small. Then look at the fact are you someone that is financially secure if the rate goes up if for some reason you are unable to refinance....

The other thing people are pretty much delusional thinking that interest rates will ever be in the 4% to 5.5% range again...People got spoiled with 911 and the whole stimulate the economy thing, and stupid things lenders did in order to make money....Now they are losing their butts...In the 70's a good rate for a fixed rate mortgage was around 15%, 80's it was somewhere between 9-11%, in the 90's it was in the 7-8% range....

If you go with the arm find out what the payment would be at the fully indexed rate, try to calculate what your income would be in 5-7 years based on raises...Can you afford that payment? Then an ARM may not be a bad idea depending on the other points I touched on..

Answer 6

Fixed, rates will probably have to go up (and maybe alot) due to inflation concerns so if you get an adjustable rate you may be paying for it dearly in a few years.

Answer 7

Fixed  - inflation is eating the value of the Dollar.

The Fed Will RAISE INTEREST RATES.  Probably this year a couple of times.  

When the next President gets into office you can be assured, He and congress will have their inflationary Borrow/Spend Bills ready to go into action.  This will cause the Dollar's rate of inflation to rise even more.

www.dollarcollapse.com