>>>>>>>>>I don't know what a heck are you talking about. Nobody takes fixed rate installments. Unless you are ex-con or something and bank would not loan you otherwise. Last time I had one was in 1997 , banks don't even offer them any more I thing.
>>>>>>>>>
>>>>>>>>>Yeah, It is all Obama's fault!
>>>>>>>>>If it is not Obama then it is sure Europe fault!
>>>>>>>>>If none works, then try Al-qaeda.
>>>>>>>>>
>>>>>>>>>Stay perplexed.
>>>>>>>>
>>>>>>>>Laying blames is exclusively your business so don't peddle it around. FYI, great majority of US homeowners take fixed-rate mortgages.
>>>>>>>
>>>>>>>Wouldn't buy a house without one. I remember the 'negative amortization' loan debacle of the 80's.
>>>>>>
>>>>>>I have what is called up here, a 'variable rate' mortgage. I don't know if that's the same thing as your 'adjustable rate' mortgage, but it's worked out beautifully for me. I came off a fixed rate of about 6% when I changed to variable rate. When I changed, I decided to continue to pay the same monthly amount as I was paying - in other words pretending I still was at 6%. That was about 6 years ago, and at no time since has the variable rate come anywhere near 6% so in fact, I've been paying off my mortgage very quickly. Right now my rate is about 3.75% while I'm paying as though it's 6%. If I'd taken a fixed rate mortgage at that time, I'd be waaaay behind where I am now.
>>>>>
>>>>>The ARM is the problem here. The adjustable rate mortgage starts out with low interest rates (to help new buyers with lower incomes who expect to earn more later). The interest rates climb over the life of the loan though. If you aren't making more money later in life when the rates go up, that is a problem.
>>>>>
>>>>>Baloon loans are another problem. You finance a portion and pay a 'baloon payment' at the end in order to keep the payments down. When the baloon payment comes due if you cannot pay it, you have to refinance the balance.
>>>>>
>>>>>I always go with a fixed rate. I like the guarantee that the payment will always remain the same.
>>>>
>>>>Ok. Your adjustable rate mortgage sounds like a completely different animal than our variable rate mortgage. See my note to Dorris.
>>>
>>>I don't think it's different at all. It's just being misdescribed.
>>
>>So the rate doesn't escalate over the life of the mortgage? Is it like ours; just floats based on the prime rate? If so, then the idea that only fools would take such a mortgage is a bit silly. I don't know if I'd take a 25 year mortgage and choose variable rate for the life of the mortgage, but in 3 to 5 year terms, it's quite workable moving from one form to the other depending on where one thinks the prime rate will be going. All I can say is that it worked out beautifully for me.
>
>No, they are different animals. We have the standard which is identical (it appears) to yours, and then we have special mortgages designed for new owners where the initial interest rate is lower than normal but guaranteed to climb. It is intended to get those who could not otherwise afford it into homes. Those just starting out. They are geared towards new owners who have a lower income but are expected to have a higher income in the years to come. It was a crazy animal. Most didn't even know about it unless the mortgage company presented it as an option. I know, because it was presented to me once and I thought 'you gotta be kidding!'
>
>As to the typical financing options, you may find this article from 1994 interesting:
>
>http://www.thinkglink.com/Speculating_On_An_ARM.htm
>
>Not much has been mentioned about baloon payment financing. Do you have that there?

Yes, they are available. I have not done one of those and don't know much about them, other than that they kinda scare me ;-)