In past decades, many people have been trained to think that a 30-year fixed-rate mortgage is the only way to go when it comes to getting a mortgage. They look negatively on [tag]adjustable rate mortgage[/tag]s ([tag]ARM[/tag]s) because they fear the adjustable part. But there are advantages to having an ARM and times where a long-term fixed-rate mortgage doesn’t really make as much sense.

An ARM, or adjustable rate mortgage, is similar to a 30-year fixed-rate mortgage in that it is also amortized over a 30-year period. But it’s usually for shorter-term situations and generally carries a lower interest rate than fixed-rate mortgages. So if you’re trying to keep your interest rate and payment low, an adjustable can be a sensible choice. And since it’s a short-term mortgage, it’s useful to have a lower rate and payment if you know you’re only going to be in your home for less than 10 years–especially when most American families generally move within nine years or less.

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