The great thing about a 30 year ARM is that while one might get lucky during the first half of the 30 year watching the ARM come down during a period of declining interest rates, there’s an entire 14-15 years of political and economic uncertainty that one gets to see if rates move in the opposite direction.

If my memory serves me correct, many ARMs that were based on 11th district have a minimum floor that rates can’t go below and also no maximum cap, that will limit how much rates can be charged.

Personally, I would never gamble with an ARM with a floor on one end and no cap on the other, because to me, that would be a lot of risk. But that’s just me. Others could get it to work if that’s the loan product that’s best for them.

There are Helocs that have 3% rates with a 2% floor and 6%cap… I know, because I have one, though currently I’m not using it.