ARM loan for investment property

[RENEESH KOTTAKKALATHIL]

Hello all,

As mortgage rates are rising, is it a good idea to use an arm loan for an investment property? Please advise.

[Andrew Postell]

@RENEESH KOTTAKKALATHIL Thanks for posting.  Always great to hear from a fellow Texan.  How does a bank hedge it's bet against inflation?  It puts you in an adjustable rate product.  HELOCs, LOCs, and yes, ARMs.  A bank LOVES it when you are in an adjustable rate mortgage (ARM). They'll give you every reason why it's a good idea to use them. If rates are moving up, what do you think will happen to an ARM? It certainly won't be going down. The tried and true formula that works is a 30 year, fixed rate mortgage. It's boring....but that's kind of the point. Everyone is different of course. I even know people who are in 20 year adjustable rate mortgages and they are doing VERY fine. But if you have the option of a 30 year, fixed rate loan....well, it's kind of hard to pass it up.