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Seems the risk with ARMs is you are betting that there won't be much higher interest rates 5, 10, 15 or 20 years from now.
Someone who fixed in at 5.5% on a 30 year will have a lot of options 5 years from now. True, when they first bought the house, they may have planned on only living there 5 years. But if the market rate is 8.5% down the road, they may reconsider staying where they are and keeping their 5.5% rate.
If the market rate is lower than 5.5%, they could always refinance to take advantage. Their is a lot of flexibility.
Someone on an adjustable won't have that flexibility. Whatever the unknown market rate is years from now, that's what they are going to have to eventually pay.
Some people don't like that risk and uncertainty.
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