Length of Stay

Physician's Money Digest, November15 2003, Volume 10, Issue 21

Mortgage decisions often hinge onhow long you plan to stay in thehouse. If you're likely to stay 10 years ormore, an adjustable-rate mortgage(ARM) may not be the way to go. Therate on an ARM can rise if interest ratesgo up, while rates on a fixed-rate mortgagestay the same. If you plan to movewithin a few years, however, an ARMcan make a lot of sense, especially ahybrid ARM, where the rate is fixed fora certain period of time. Hybrids comein a variety of terms, from 1 to 10 years,with the rate increasing along with thelength of the term. If you're planning tomove within 5 years, you can currentlyget a 5/1 hybrid ARM with a rate that'sabout a half point less than a 15-year,fixed-rate mortgage. Talk to a mortgagebroker for more information.