So I'm really tired of the dums claiming that all ARM's are bad and it is all the big bad evil banks fault.
If you understand (make an effort to know and read it) ARM's can be a really good move.
7 year ARM locked in at 5.875 end of 2001 (closed late 10/01)
first reset 4.75
second reset 3.125
3'rd reset effective 11/1/10 3%
Who's the winner? ME!!!!
Our bank hounded us from year 5-7 to refinace to a fixed and we told them to call us when they could beat our reset rate plus the refi costs. They finally quit about year 6 1/2.
We still get tons of unsolicited refi offers from many brokers in the mail.
Do they think we are stupid?
Every reset so far has helped me reduce my principle by large amounts since I have the common sense (THIS MAY BE A KEY POINT) to continue to pay my original mortgage payment.