(11-27-2018, 05:08 PM)HURRICANE!!! Wrote:

(11-26-2018, 09:36 PM)HandsomeRob86 Wrote: I don't think people are buying ARM's like they did 12-15 years ago. The only good thing out the recession is that people seem to be a little more aware of this kind of thing now.

ARM Loans should be eliminated, unless one pays 25% down and has an excellent credit score of 800+.  The population as a whole is not savy enough to really mentally absord the financial impact they face once those discounted periods end.

ARM loans do have a purpose. If you know going in that you're only going to be living somewhere for 3-4 years and you'd rather stay in one place the whole time than move around when rents change and landlords cancel leases, a 5-year ARM makes a lot of sense. The problem with ARMs is that there are still people out there who take them out on a house they intend to live in long-term. Yes, on day one, it keeps their payments way down and they can afford more house than they should have moved into. Once you hit the fifth year, the interest rate jumps and so do your payments, and suddenly that house you could afford is now out of your price range with you in it.

---