Given these negatives, however, adjustable rate mortgages can be a good choice for some home buyers. Adjustable rate mortgages can be especially useful for home buyers who are not planning to stay in the home long term. Executives or sales representatives whose jobs keep them moving around the country often purchase their homes using adjustable rate mortgages, for instance. The idea behind this is that when it is time to move, the home buyer can take advantage of the equity they have built up, combined with the rise in the value of their home, to pay off the mortgage and make a tidy profit. It is likely that a good portion of the mortgage payments made were at the low introductory rate on the mortgage. This can be a wise strategy.
While we are on the subject of introductory rates, it is important that the home buyer understand the terms of the low introductory rate. These so called teaser rates are usually in force for a very limited amount of time, after which the mortgage interest rate rises to market interest rates. It is important to be sure you understand all the terms and conditions, whether your mortgage is a fixed rate or adjustable rate mortgage.
