Over the past three weeks, they have gone down, and are really, really low right now. The 30 year fixed mortgage can be obtained for less than 4.5%. 15 year fixed mortgages are going for less than 3.75%. With interest rates this low, why would anyone want do do an ARM? Aren’t those those risky loans that caused the financial meltdown?
Adjustable Rate Mortgages can vary, but they usually have a fixed rate from 3-7 years. During these years you know exactly what the interest rate is going to be. They are usually amortized over 30 years, so they can offer a very affordable payment option. Many Utah Mortgage lenders can provide ARMS right now for LESS THAN 3%. That’s probably less than the rate of inflation and pretty much free.But the interest rate will probably go up in five or seven years when the ARM expires, then won’t it actually be more expensive than a getting a regular 30 year fixed loan?
Maybe. But if you aren’t going to stay in the same home for more than five years, then it doesn’t really matter does it. Who cares what an interest rate might be if there is no chance you will ever be paying it.There is also a new wave of home buyers with the attitude that they want to pay their homes off. Their definition of home ownership isn’t having a mortgage, but actually owing a home free and clear. These buyers are purchasing homes well below their means, and are paying extra with every monthly payment. For buyers with these attitudes an ARM is probably a very good idea.
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