We have an ARM, have had it for 10 years. It's currently at 3.5%

I guess it depends on the bank.

I have two arms. They work pretty well for tasks such as lifting, pushing, and pretending to fly around my apartment like an airplane.

ARMs, in and of themselves, are not bad things. giving them to people who can't afford them is.

WaltzingMathilda: ARMs, in and of themselves, are not bad things. giving them to people who can't afford them is.

If you know you're only going to own the house for the short term, it can be a "win-win".

If you know you'll be in a position to get a much better fixed rate in five years I think they are a good idea.

AuntofDogface: WaltzingMathilda: ARMs, in and of themselves, are not bad things. giving them to people who can't afford them is.

If you know you're only going to own the house for the short term, it can be a "win-win".

they are also good for short term cash flow for people who can afford the hit in 5, 7 or 10 years when the loan expires.

also, those ARMs weren't from 5 or 6 years ago. i was offered one last summer.

My arm is about to adjust to a lower rate. Heh.

Is this where we brag about our fixed-rate mortgages, and making extra payments on the principal as well to shorten the mortgage duration?

Flab: Is this where we brag about our fixed-rate mortgages, and making extra payments on the principal as well to shorten the mortgage duration?

Yes, this is the place. Also, no credit card debt, a gigantic 401K, a Roth IRA that dwarfs the GDP of most nations and a large penis or breast (which ever applies).

Just did a re-fi on my house for 4.6% and took a few years off of the loan in the process. A variable right now would be insanity. Rates can only go up from here.

We have learned NOTHING!

Tell me about those bonuses, Goldman?

And Citi just sent me an offer for a $6,000 "whatever you need it for" loan! Where do I sign up?

Dinki: We have an ARM, have had it for 10 years. It's currently at 3.5%

I guess it depends on the bank.

Yeah, my ARM that I've had for 6-years just reset to 3.5% too... I guess it really does pay to be financially responsible too...

Electric Boogaloo!

NightOwl2255: Flab: Is this where we brag about our fixed-rate mortgages, and making extra payments on the principal as well to shorten the mortgage duration?

Yes, this is the place. Also, no credit card debt, a gigantic 401K, a Roth IRA that dwarfs the GDP of most nations and a large penis or breast (which ever applies).

So true. The avalanche of "look how responsible I am with my money" posts are sure to follow.

I also enjoy playing "spot the real estate agent" in these threads.

Hello.

The banking casino is open again!

The short-term memory of the unwashed, which was once fixed on fear will return to greed.

Calling all new irresponsible suckers...line up to the left!

In laymans terms, rates aren't going up just yet...but beware - once there's an ample supply of people suckered in....;-)

A credit score of 720 is pretty good and that should translate into a lower risk profi... eh, who am I kidding. This is bad idea. Any builder or bank offering ARMs at this point should have their FDIC membership removed and never get another dime of bailout money.

NightOwl2255

and a large penis or breast (which ever applies).


So... just the one, then?


*goes shopping on Amazon*

Gwendolyn: If you know you'll be in a position to get a much better fixed rate in five years I think they are a good idea.

Sounds exactly like a few people I knew that went under. You just DON'T know what the next five years will be like.

/ARM?

What economy melting ARMS might look like, BROTHER!

sigdiamond2000: NightOwl2255: Flab: Is this where we brag about our fixed-rate mortgages, and making extra payments on the principal as well to shorten the mortgage duration?

Yes, this is the place. Also, no credit card debt, a gigantic 401K, a Roth IRA that dwarfs the GDP of most nations and a large penis or breast (which ever applies).

So true. The avalanche of "look how responsible I am with my money" posts are sure to follow.

I also enjoy playing "spot the real estate agent" in these threads.


I'm sorry, can someone explain just why I shouldn't be proud of being fiscally responsible??

Gwendolyn: If you know you'll be in a position to get a much better fixed rate in five years I think they are a good idea.

How exactly does one "know" what things will be like 5 years from now?

/The Stupid. It burns.

There's nothing wrong with an ARM.

Provided it has a cap on the interest and it has a cap on the size of the adjustment and you have an honest banker who explains what your max payment could end up being.

/Credit Union FTW.

ARMs CAN be a great deal. You just have to make sure the terms are agreeable, just like any contract/mortgage. If you're going to sell your house at some point soon, maybe an ARM is better for you. If you re-finance at the end of the terms, you are going to end up taking a step backward, but if you're smart about it and have a reputable lender, this isn't any different than a normal re-financing... though you are at the whim of the market as far as the specifics... good deals can still be found.

DO NOT DO LENDING TREE... Someone(s) WILL call you within minutes of your application and then they will never stop, and who knows what "bank" they represent or where they're located.

BabyShaker: I'm sorry, can someone explain just why I shouldn't be proud of being fiscally responsible??

It makes some people feel bad about themselves.

Whodat?: We have learned NOTHING!

Tell me about those bonuses, Goldman?


Of course we learned something.

If you're a big bank, the government will bail you out, no matter what you do. Why should they change their business model?

Is this also a good place for me to mention that my 401k is only about 3 grand away from being equivalent to stuffing my money in a mattress?

NightOwl2255: Flab: Is this where we brag about our fixed-rate mortgages, and making extra payments on the principal as well to shorten the mortgage duration?

Yes, this is the place. Also, no credit card debt, a gigantic 401K, a Roth IRA that dwarfs the GDP of most nations and a large penis or breast (which ever applies).

I'd also like to point out that I don't own a television, I built my own computer for $75 in parts and whatever woman you find most desirable has unacceptably sharp knees.

BabyShaker: I'm sorry, can someone explain just why I shouldn't be proud of being fiscally responsible??

There's nothing wrong with being proud about it at all. But bragging about it on an internet forum is sort of pathetic.

Spindle: Is this also a good place for me to mention that my 401k is only about 3 grand away from being equivalent to stuffing my money in a mattress?

Yeah, this does seem like a good place to mention that you are irresponsible with your money.

I have a 30 year fixed at 4.75 and that's the right mortgage product for me...HOWEVER it really pisses me off to see IDIOTS - and there's no other word for it really, these people are IDIOTS - who vilify ARM's like they're the ebola virus. They're a mortgage product people - that's it. One of the many choices available to us and extremely appropriate in particular situations. There are many examples when they are absolutely the perfect mortgage product for a given situation. Were they overused? Definitely. Were they purchased by people who had no reason using on? Undoubtedly. Did unscrupulous bankers push people into ARM's when it was the wrong product for the client? Without question. That's on them. There's nothing wrong with ARM's under the right circumstances and they are often the best choice. If you don't understand which mortgage product would be the best one for your own situation and why you should wait to buy a house until you do.

tjfly: Any builder or bank offering ARMs at this point should have their FDIC membership removed

All right - one of the idiots I was talking about earlier

The important part is the "to buyers with credit scores of at least 720."

That's the responsible part of responsible lending. The vehicle didn't cause the crash.

BabyShaker:

I'm sorry, can someone explain just why I shouldn't be proud of being fiscally responsible??

These threads tend to fill up with anecdotal stories from people who aren't one of the millions of people that have been thrown out of work in the last year. In short, most people are "financially responsible" when everything is hunky dory.

Don't we have the RIGHT to bear arms? How dare the banks take those loans away from us?!

ARMs have been around for a long time, they didn't change and become suddenly evil in the last few years.

The type of people who were being allowed to GET them changed, which was the problem.

the_sidewinder: /ARM?



//ARM?

Well when the Fed swoops in to bail you out due to your irresponsible behavior as a bank you have no risk. In fact in a way the banks are rewarded for their greed by having dibs on my tax revenue.

Arms themselves aren't bat. Having people plan their finances on the low portion of an initial arm and being to stupid to realize that it could be a problem is.

*clears throat*

I just paid off my mortgage in less than five years by scamming old people into sending money to "Nigeria." I have a 40' yacht with two 60" flatscreen televisions that I only use to view high-quality porn. No credit card debt, no student loans. People who can't afford to be rich are scumbags.

/how was that?

Maxor: Arms themselves aren't bat.

ARMs are very useful financial instruments in certain situations and certain markets. If you're expecting rates to go down to warm up a cooling market or if you're planning on doing a refi (or sale) around the time the the special rate expires you can save a pile of money.

ARMs aren't a bad thing any more than a hammer is a bad thing even though you can smash someone's brains out with a hammer. If you're buying something you'll be able to afford with the payments where they'd be when at the cap they're not even really that risky.

Spindle: Is this also a good place for me to mention that my 401k is only about 3 grand away from being equivalent to stuffing my money in a mattress?

heh, mine too. My annualized rate of return for the last 10 years is 1.3%, it's lost money vs. inflation. I hope it recovers in the next 15 years before I need it.

/at least the company matching makes it worth having. 25% biatches!

credit score of at least 720...

I wasted my time reading that.

rocketkitty: *clears throat*

I just paid off my mortgage in less than five years by scamming old people into sending money to "Nigeria." I have a 40' yacht with two 60" flatscreen televisions that I only use to view high-quality porn. No credit card debt, no student loans. People who can't afford to be rich are scumbags.

/how was that?

2/10

Too funny to be seen as a troll....

If Toll Brothers truly only has a 1.7% default rate on their mortgages in this environment then more power to them; they clearly know how to screen their applicants. I'm willing to bet as part of their process they measure the applicant's ability to repay should the loan adjust upward to it's maximum potential.

It's not the adjustable rate mortgage that has caused all of these problems we're faced with today; it's giving them to people regardless of their credit history without verifying their stated income and ability to repay the loan in the first place.

there is nothing wrong with arm's. It's the liberal's in congress who believe everybody should be equal, therefor forcing banks to loan to people who suck at life.

Wizzin: BabyShaker:

I'm sorry, can someone explain just why I shouldn't be proud of being fiscally responsible??

These threads tend to fill up with anecdotal stories from people who aren't one of the millions of people that have been thrown out of work in the last year. In short, most people are "financially responsible" when everything is hunky dory.

There's more to being financial responsible than just picking the right credit card or negotiating the best mortgage terms. In fact, overall, it really doesn't make much difference what type of credit people have -- the idiots who live beyond their means are always going to run into trouble, even with the best borrowing terms in the world.

Financial responsibility includes things like planning for potential unemployment, a medical problem or other unseen expenses, natural disasters, etc.

Oh, and it also includes things like ensuring you actually have marketable skills in case you do lose your job and have to find another one.

Even when things aren't "hunky dory", the responsible people usually end up just fine because they've planned ahead.

Next round of foreclosures and financial idiots will soon be realized. Many people with home equity lines of credit (2nd mortgage in many cases) will notice that the current rate they are paying is less than on their first mortgage. A number of people will also notice that they have room under their line of credit to absorb the balance of their first mortgage and consolidate all to a single payment at a lower rate. For now. Rates on lines of credit are generally of the ARM variety and this has the potential to hurt them in the long run. Bailout II soon to follow. We need to stop paying for stupid. Let stupid suffer the consequences.