No. of Recommendations: 3
With interest rates at historic lows, it is hard to argue they will go much lower. Hence, getting a 30 yr fixed rate mortgage sounds like a no brainer. You lock in that rate for a long time.

Of course lenders would much prefer to give you an ARM, because they have every reason to believe rates will be higher for most of that 30 yr period. They react by raising downpayment and credit score requirements--essentially to cut lending to a minimum while rates are low.

Of course news releases to convince people to consider ARMs as a better deal are part of the game. But I doubt anyone with the smarts to get a decent credit score will buy into that sales pitch.

I do agree it's a no brainer product as it's absolutely the best mortgage option for those who wish to exert zero brain power on making a product decision.

Others can decide what's best for them based on their circumstances.

If I had a nickel for every friend/client/colleague who insisted that they must have a 30 yr FRM and that they would hold that loan for at least 12 years (which is about how long you need to hold it to make it the best option vs. a 10/1) and then refinanced or paid off that loan within 7 years, I'd be a very rich man.
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