The idea of an ARM (or Adjustable Rate Mortgage) seems really intimidating, especially for first time home buyers. It can seem scary that you may have a different mortgage payment each month, and most people prefer the security of a fixed rate mortgage. However, there are reasons why ARMs exist, and why buyers opt for them all the time. Check out this article by Holden Lewis at the Bankrate blog to be fully informed on the pros and cons of ARMs:
Pros:
-Generally, the initial interest rate is lower than a fixed rate mortgage
-The interest rate can even go lower, lowering monthly payments
Cons:
-The interest rate can also rise, increasing payments
-Payments can be unpredictable