Good to know... we are buying a house in the next week or so.

Could you explain the difference and why you should choose one over the other in certain situations? We are buying our first home and this is something that is definately a big deal to us right now.

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Mommy To Brody(3 years) Mason(20 months) Orin (3 Months)

"It's easy to pass judgement, it's more difficult and more meaningful to love someone" Big Love


"Cholesterol won't stick if you have the right attitude"

Fixed for us when we bought our home last summer the rates were going up fater then they had in a while.. So we even locked in our rate early I think it like 2 months before we closed.

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Ours s fixed, I've heard so many horror stories about adjustable and balloon ratesthat I could never do that. I like knowing what I'll be payingfrom now, until I get my mortgage paid off.

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"And the state of his bathroom -- I'm not one to gossip, but there are things crusted on his sink that have not simply developed intelligent life but have in all probability by now evolved their own political systems." Cain describes Abel in in SANDMAN #70

Fixed all the way! We just signed a new mortgage on Friday and never even considered anything else!

Amy

We have a fixed rate mortgage, but I will have to defend ARMs. They are useful tools. For example, my parents knew they would be retiring last year. They also knew their house was in a prime location that would sell.

They refinanced 3 years prior to their retirement plan with an ARM. It was some obscene number like 3% or something. It was not scheduled to changed until 5 years out. So, that gave them a cushion of 2 years to sell their house. It sold in 3 weeks and they walked away with a lot of money and saved a bundle by refinancing to the ARM.

So, it can be very useful if used correctly. For the majority of people, us included, it would not be a good thing. We plan on being here for more than 5 years and we don't live in an area that sells quickly. So, for the majority of people, fixed is the way to go, but I just wanted to point out that there are situations where an ARM is a very good deal.

Fixed

I totally agree that ARMs can be a good tool but only if you really understand what you are doing. I would get one in the proper situation but only because I have a strong understanding of how they work. We have a fixed, 15 year mortgage at 4.75%. I was just shocked to hear that over 50% of the mortgages originated in West Virginia last year were ARMs. I can't image how many people got themselves in a situation that they didn't understand!

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Wow, I have to say, I'm very impressed. From the sounds of things on the news, it sounds like a lot of people are in trouble because of adjustable rate mortgages adjusting up. But it looks like these Mommysavers aren't your average person. :happy dance:

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We have an interesting mortgage, but it is a fixed rate. We have a two part loan for first time homebuyers who had no down payment. So for the first 5 years of our 15 year loan, we have two loans, one at a smaller payment, at I think 9% interest and then a larger payment at 6% interest. When we are through paying the smaller 5 year loan, we refinance the amount of the rest of the 15 year loan for a much smaller interest/payment. Should be interesting to find out what we get when that day comes, we are a couple years away. It has worked well for us, as our note is only $420 a month. It will be smaller when we refinance. We will see. I'm for the fixed though, even though using an ARM can be very useful if it will work well for your situation.