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Is an ARM loan risky?

Is an ARM loan risky? I'm considering taking out an ARM loan at a lower interest rate with the hope of refinancing before the rate increases. Is this a good idea to save money on interest now while the rates are high? Or is it too risky?

Asked By Brad | Bozeman, MT | 74 views | Finance Legal Info | 2 months ago

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Semi-Pro

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Julianne Clark / Your Lowcountry Realtor

Charter One Realty

(45)

The risk assessment depends on you and your long term goals. An ARM can be a great tool if approached in the correct way. Do your research to determine what the financial saving may be and the risk involved if the rates change up or down. Find a local lender (or two) that will be straightforward with you about the program and not just try to sell you a loan. Anticipating mortgage rates changes is like gambling or predicting the weather. There is some skill involved as well as an element of chance.