Adjustable rate mortgages?

[perfectbowler300x3]

When shopping for my mortgage three years ago i had two options, the classic 30 year fixed or the gimmick hot and new adjustable rate mortgage. I went with the traditional fixed. Now all you read about is how all these people got a ton more house than they need and now they are mortgage broke or are losing their homes because the rate is adjusting up. Am i the only one out there who saw this coming and dont feel sorry for the fry cook in the 250,000 mansion who now cannot afford it?

[Kegger]

Well it's an unfortunate situation for a lot of people who were in the subprime field...but some of us just happen to be making a lot of money of bets that the subprime rates would fail..that's just life i guess

[Ron Berue]

You were given the choice because you qualified for both, didn't you? Congratulations on your great credit rating and income level.There are folks out there who wanted the American Dream. They could only qualify for the A.R.M. Now its time for the A.R.M. to re-adjust.There are a few companies who are working with the "fry cook", doing their best to make a not-so-good situation a lot better.BUT - here's THE CATCH: that "fry cook" MUST communicate with the mortgage company. There's no help when that "fry cook" puts the head in the sand and ignores everything and everyone.Thanks for asking your Q! I hope you can see things from another perspective.VTY,Ron BerueYes, that is my real last name!

[Green_Sea_waves]

The easy answer is pay what is reasonable to pay. You shouldnt choose an ARM rate unless you arent going to refi out before the fixed period ends or plan to sell. The average length of any note held is 7.4 years according to Fannie Mae, so its perfectly acceptable to offer half that as a suggested way of purchasing before you have the equity to invest ten to twenty percent of your purchase price.