ARM's can be good in a situation where rates are falling. However they seem to be getting used lately as a means to get the lowest monthly payment, and there for be able to afford more house than otherwise could be. This will lead people into trouble because interest rates are going up, and probably will for the next couple of years.

Interest only mortgage's are anothing poor idea, don't get me going.

All these different loan types do have there place, investors and people with higher financial intelligence can use them to there advantage. However for the average person looking to buy a house, a fixed rate IMHO is currantly the best way to go. Interest rates are still not bad.


What is currantly affecting a lot of people are those 80/20 loans. Try moving in 2 years if all of a sudden your house drops $50,000 in value. In some cases these people simply cannot move. Again though, if one is young and plans on staying in said house for quite a while, like 5-10 years, such a loan is not a bad idea.

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