[Bill]

If you are planning to pay it off quickly, go ahead and get the arm. You lock in the lower rate when the balance is higher. Hopefully rates drop at some point, but even if they don’t, you’ll have most of the balance paid off before the rates reset.

[Matthew]

It’s an option as long as you plan on selling/paying it off around that time. I wouldn’t pay down the mortgage in 8 years just because of the rates though.

[Ally]

We did a 5/5 arm with an 80/15/5 and avoided PMI through the 15% being in a HELOC. They are hard to find but they exist. We did it this way because the property we wanted had potential for growth, so we kept the extra 15% of our 20% down payment to finish the basement and then refinance.

We finished the basement after 3 years and refinanced before the arm had a chance to go up. Had enough equity in those 3 years after adding the large basement to refinance under 80% LTV and got a killer rate.

So in my opinion arms traditionally suck, but if you have a plan and can stick with it they can really save a lot of money and allow more freedom with your money.

[Heather]

If you have a plan to pay it down or off in a short amount of time and want to stick to a lower payment, then considering an arm isn’t that crazy!

You can also pay my principal as you see fit. You can also always refi’s later down the road if you don’t finish paying it off or sell it.

[Author]

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