A friend of mine and I bought houses at about the same time in 2001. He bought in Dallas, and I bought in the O.C. We both got 30-year fixed rate mortgages. In 2004 my friend’s employer relocated him to NYC, and in 2005 I sold to relocate to northern L.A. county.

We both threw lots of money down the drain by not having signed up for 5-yr or 7-yr ARMs. True, my house doubled in value, but I could have saved serious $$ with an ARM. People do move more often than in the past.

A 30-yr fixed mortgage is a superior product, but we pay more for it (in the same way that a Camry costs more than a Corolla b/c it’s a better car).