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Rainmaker
4,582,173
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

It's best to discuss and decide between buyer and their lender.

Sep 29, 2019 06:40 PM
Rainmaker
1,201,477
Doug Dawes
Keller Williams Evolution - 447 Boston Street, Suite #5, Topsfield, MA - Topsfield, MA
Your Personal Realtor®

That depends on the needs of the buyer

Sep 30, 2019 02:37 AM
Ambassador
5,253,985
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

They're typically good for a short-term stint in one place/property.

I would strongly advise seeking the advice of a financial planner and a lender so you can make an informed decision.

Sep 29, 2019 09:12 PM
Rainmaker
2,399,894
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

I've never been a fan of adjustable rate mortgages but they can work great if you don't plan on staying in the home long.

Sep 29, 2019 06:14 PM
Rainmaker
759,485
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

When you plan to stay in the property short term.

Sep 29, 2019 05:43 PM
Ambassador
6,417,184
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

When planning to leave in a few years.

Sep 29, 2019 08:15 PM
Rainmaker
962,383
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

I used an adjustable-rate mortgage when I knew I would be moving in 5 years or less. Went with a 7-year ARm and reduced my interest meaningfully.

Sep 29, 2019 07:00 PM
Rainmaker
5,112,421
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Many different factors to consider. I suggest you have an indepth discussion with a lender. As a Realtor I don't provide advice on financing except in very broad terms.

Sep 29, 2019 10:22 PM
Ambassador
2,071,106
Alan May
Jameson Sotheby's International Realty - Evanston, IL
Home is where the hearth is.

An excellent question to discuss with your lender.

Sep 29, 2019 07:24 PM
Rainmaker
1,231,853
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Talk with your lender.

Sep 30, 2019 05:39 AM
Ambassador
5,060,488
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

If the time frame in the home is only a few years.

Sep 29, 2019 09:54 PM
Rainer
225,526
Bob Betel
Allstar Home Mortgage, Inc. - Sweetwater, TN
President, Allstar Home Mortgage, Inc

The idea here is that the rates are lower the shorter term you take out. Adjustable rates are used for “short terms” thereby saving you money. Most thinking is that you should use an Adjustable rate ONLY if you are 100% positive you plan on selling your home before the rates adjust. However, it depends on the economic cycle that we are in. If interest rates are going up, you need to be prepared for your adjustment to go up. If interest rates are going down, like the last 12 years, your adjustments will also be lower than before. I had a 7 year ARM and kept it for 12 years and my rate adjustments kept going down. In years past, these ARMS were taken because the future insterest rates were headed lower. Now that we are in a low rate environment, it is better to go with a fixed rate loan for the long run.

 

Sep 30, 2019 06:17 AM
Rainmaker
4,175,917
John Pusa
Glendale, CA

Many great responses.

Sep 29, 2019 08:54 PM
Rainmaker
636,227
Jason E. Gordon
CMG Mortgage, San Diego, CA - San Diego, CA
Sr Loan Officer, CMA, CMPS, CDLP, CDRE, RCSD, CDPE

Generally speaking, the longer you "fix" in the interest rate on your mortgage, the higher the interest rate (thus the higher your payment and amount of ongoing finance charges).

Of course the opposite is true for short term fixed rates (as they are typically lower).

With this simple concept in mind, if you are pursuing a short term mortgage solution (1-3 years for example), you might consider a short term fixed mortgage (i.e. ARM, 3/1, 5/1). By having a short term desire for the money, you can typically enjoy lower rates from the inception of your loan, then "ride out the storm" with fluctuating rates with a lower probability of risk.

It bears noting that certain economic markets move in different directions (Google "inverted yield curve" for details). In the end, it is always a good idea for the Borrower to speak with a fiscally literate Mortgage Loan Officer to discuss options, goals & timelines specific for that Borrower. 

Thanks for the shout Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D 

 

Sep 30, 2019 07:47 AM
Rainmaker
1,553,094
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

The answer varies with each person considering it; you simply can't give a generic answer to this since each borrower is different, outside of it often being a lower monthly payment opportunity. I'd ask Jason E. Gordon 

Sep 30, 2019 07:24 AM
Rainmaker
3,416,038
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

ONLY if you are staying in a home less than 5 years. and that the rate wont adjust for said 5 years. Otherwise, with rate sthis low, lock them in for 30 years

Sep 30, 2019 05:37 AM
Rainmaker
1,206,238
Peter Mohylsky, Beach Expert
PMI. Destin - Miramar Beach, FL
Call me at 850-517-7098

Run the numbers compare the long term costs and make a decision based upon facts not emotions.

Sep 30, 2019 04:58 AM
Rainmaker
4,900,966
Richard Weeks
Dallas, TX
REALTOR®, Broker

When one knows absolutely, positively, 100% sure you are only going to live in a house for a short period of time then an ARM may be the way to go.

Sep 30, 2019 04:32 AM
Rainmaker
4,960,426
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Not now with low interest rates.


Sep 30, 2019 08:17 AM
Ambassador
3,349,404
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

I wish you all the best with your real estate studies. 

Sep 30, 2019 07:40 AM
Ambassador
3,138,591
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

When it best suits the circumstance. A lender can help with that!

Sep 30, 2019 07:01 AM
Rainmaker
1,241,754
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Not licensed in loan. Not allow to ans that question.

Sep 29, 2019 08:11 PM
Rainmaker
7,863,162
Roy Kelley
Retired - Gaithersburg, MD

When an ARM best meets the needs of the borrower. 

Those who plan to move in a couple of years may be good prospects.

Sep 30, 2019 02:18 PM
Rainmaker
469,510
Dan & Laurie Pittsenbarger Team
Keller Williams Western Realty - Bellingham, WA
Lakeside & Coastal Single Family Homes

Most commonly when you know that you're only going to be in the place 2 or 3 years.

Sep 30, 2019 09:00 AM
Rainmaker
5,772,575
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

I agree once again with Michael Jacobs 

Sep 30, 2019 08:34 AM
Rainmaker
1,506,013
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

first you have to ask with a name.  Then ask a lender.  Reported.

Sep 30, 2019 07:35 AM
Rainmaker
787,665
Abby Stiller
TOP SELLING REALTY - Cape Coral, FL
SW Florida (239) 284-8637

You already got great answers from lenders 

Sep 30, 2019 05:25 PM
Ambassador
2,187,587
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

 Like Mel Ahrens, MBA, Kelly Right Real Estate , I took advantage of an adjustable rate mortgage for a short term refi.  Saved us a lot of money on interest expense.

Sep 30, 2019 04:08 PM
Rainmaker
1,322,984
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Adjustable rate mortgages were very good deals when rates were plummeting. In a rising rate market the opposite would be true.

Someone who is only planning to own the property for a short time may think an adjustable rate mortgage is a good option. Of course, selling within a short time, with the attached costs, may not be in an owner's best interest.

Sep 30, 2019 03:21 PM
Rainer
182,965
Harjeet Bhatti
FITH THIRD BANK - Chicago, IL
Home Mortgage Consultant 25 States

Fix rate is not always good option for all the clients. Paying higher rate and staying in property for shorter period of time will effect on equity position.

Sep 30, 2019 02:45 PM
Ambassador
1,077,981
John Meussner
Mortgages in AZ, CA, CO, DE, FL, GA, IN, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI - Fair Oaks, CA
#MortgageMadeEasy Fair Oaks, CA 484-680-4852

In the current marketplace, rarely.  In a market where the rate spread between fixed and adjustable rates is greater, then shorter term loans can offer borrowers a substantial savings.  

 

Also in cases where the borrower knows they'll have a windfall and will be able to pay their loan down or off in a short period of time.

 

And sometimes when someone makes enough income to have an ARM come with close to 0 risk.  They can afford the payments, saving interest during the intial fixed period, and if rates end up going up and they can't/don't refinance, rate increases won't negatively impact them.

 

In the current market though, fixed rates are better options for 90%+ of borrowers

Sep 30, 2019 10:51 AM
Rainmaker
5,583,328
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

a good discussion to have with the lender....

usually, when rates are high and you're not staying long term...

Sep 30, 2019 09:42 AM
Rainer
420,003
Caroline Gerardo
Licensed in 20 states - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Most often never; but, if buyer is positive for certain they only need half the time of the fixed time period, maybe. 

Sep 30, 2019 05:27 PM
Rainmaker
5,877,319
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Not for me to make an opinion, not a lender.

Oct 10, 2019 10:02 AM
Rainmaker
631,708
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

They are best for buyers who don't plan on staying very long

Oct 01, 2019 03:43 AM
Rainmaker
2,071,025
Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL

Depends of the buyers needs

Sep 30, 2019 09:44 PM
Rainmaker
1,598,452
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

Depends how long you want to have that property.

Sep 30, 2019 08:10 PM