[Rick Lee]

ARM's are NOT sucker loans!!!! Why would anyone pay for a 30 yr. fixed rate if they are not positive they'll keep the house for 30 yrs.? Those loans are so much more expensive than ARM's and the vast majority of 30 yr. fixed loans are paid off (by refi or sale of house) in seven years. My folks are about to retire to their beach house and THAT is the kind of house that makes sense for a 30 yr. loan, though I doubt either of them will live that much longer. Do you really know anyone under 40 who lives in a house they swear they're gonna keep forever? I doubt it. I have a 5/1 interest only ARM on my house and it makes perfect sense for my situation. My rate is 4.375% and I can pay down principle anytime I want, but have a low minimum payment if that's all I want to or can pay. In the very unlikely case that I'm still living there when the ARM adusts, I'll just refi it. But most likely I'll have long since sold it.

BTW, I took an FHA 1 yr. ARM on my first house and when it adjusted, it actually went DOWN.