There are also shorter terms available if you can afford the payments (say, 15- or 20-year fixed).
Many first time buyers are wary of ARMs, but they may actually be preferable for those who don’t intend to stay in a home long, such as young couples looking to grow their family, or buyers interested in a fixer-upper opportunity that can be upgraded and sold at higher value within a few years. There are plenty of options for ARMs designed for buyers interested in staying in a property for just 1-3 years, up to 7-10 years, for example.
The major benefit of ARMs is that they typically feature lower interest rates and down payments to start, and if rates go down, homeowners will benefit. However, there’s always the possibility that rates could increase, resulting in higher payments over time. Before choosing this loan type, it’s best to have a solid plan and understand potential outcomes.