Does my situation call for an ARM?

QuestionsDoes my situation call for an ARM?
Maple Nunn asked 6 years ago

hi everybody,


i’m currently in the process of saving money and (trying to) raise my credit in order to purchase my first home sometime in late 2015 or early 2016.


I should be in the 715-750 range for mortgage FICOs and I should have somewhere around $ 40k saved conservatively for a down payment.  In my housing area, prices are high and I’m looking somewhere in the $ 320k-$ 420k house range. 


With that said, I know conventional wisdom right now is to take a 30 year fixed rate mortgage because rates are historically low.  I also know that typically people wanted ARMs when they thought rates would be dropping in the future (which is opposite of the current climate.) 


Here is my current situation, though, which makes me wonder if an ARM is “generally” going to be a better fit for me.  I know it’s hard to say without actual quotes. 


I am single.  annual salary of $ 101k and monthly debts of less than $ 200 per month.  Financially I am paying for the house myself, but will be moving in with my girlfriend of 3 years.  We are discussing marriage in the near future.  She is currently a full time student and will be back in the work force in a little over a year and a half.  If I got a 5/1 ARM, by the time the periodic adjustments kick in, we will most likely be married with a BIG increase in annual joint salary.  Most people don’t live in their first houses for 30 years, either. 


I feel like I can save some good money if I go ARM here instead.  Does this make sense? 

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