mortgage
ARMs weaker but still pack a punch
ARMs for the times of our lives
Some stages of life lend themselves to ARMs more than others. Here's a guide to see how you might fit.
 | | ARMs for different stages | |
| | | | Single/young couple | Yes | If you're buying a first home or starter home that you expect to upgrade as you have children and earn promotions, you may benefit from an ARM with an introductory term that is a year or two longer than you expect to stay in the home. | | Family with small children | Probably not | If you've upsized to your dream home
-- or at least a house you see yourself in for a decade or more -- you'll generally benefit by sticking with the security of a fixed rate.
| | Family with teens/college-age children | Yes | An ARM can be a good choice for families who need every extra penny for college and retirement savings, and who will have extra cash once junior's tuition bill has been paid off. It's also beneficial for people who plan to own a home for only a few years before downsizing to a smaller place once the kids are out of the house. Be sure, however, that you're willing to sell before the introductory term is up or be willing to sacrifice savings that may be better used for your golden years. | | Empty-nester/retiree | Probably Not | ARMs are rarely good choices for those living on a fixed income, as most retirees do. It may be tougher to weather sharp upticks in loan rates, so stick to a loan that has predictable payments for the long term. |
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