Buying a first home is something that can be confusing at times, and can lead to a lot of apprehension. Comparing rates and lenders can be exhausting.
There are also numerous misconceptions out there about buying a home that many who are purchasing for the first time believe. One perfect example of this is the myth that a variable rate mortgage, sometimes called an adjustable rate mortgage - or ARM - is never the right decision.
That's brought on in part because of the fact that adjustable rate mortgages played a major role in the downturn of the economy and the housing market crash. But, that was due to irresponsible use of them. The key is understanding the right way to use them. And for first time home buyers, there are some good reasons to think about an ARM.
When you consider the points above, it becomes clear that an ARM might not be a bad idea. The key is making sure that you fully understand the loan you're agreeing to. Pay attention to how the interest is structured, how long it will remain fixed, and more. This will help you be sure to get exactly the loan you need - you can often have better luck restructuring parts of a variable rate loan than you can a fixed one.
If you're planning on living in your home for decades, it's obvious that a variable rate mortgage probably isn't the best call. But for those who know they'll likely be buying their first home, keeping it for a few years, and then moving on, this is one option that you simply can't afford to ignore. It might give you exactly what you need from a home loan and help you save money in the process.