First Property Considering an ARM

[Jake DiLaura]

Hey BP Community!

My wife and I are looking to buy a small condo as our first place with the mindset to keep it as an investment. We're considering an ARM as we don't intend to be there much longer than 12 months and feel like rates will go down in the next few years, so I wanted to ask.. what kind of rates are you seeing with ARMS right now? Also, what are the potential downsides to an ARM in our situation?

Thanks!

[Eric Greenberg]

I dont know the going rate of ARMs vs fixed rates for your scenario so the first thing is to check if its even worth it. Since you will only live there for a year Id think it could be best to get a fixed 15-30yr loan as tight now its your primary which would be a better rate then a investment property when you go to refi. 

You are more or less trying to time the market with the belief that in X years an investment property rate will be better than todays fixed primary rate (assuming you dont plan to move back into this unit).