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The ARM Adjustable Rate Mortgage for the Real Estate Investor

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Why Would a Real Estate Investor Want an ARM?

Like all financial instruments, ARMs have pros and cons. An ARM may offer a lower initial rate than a fixed rate mortgage, which makes it suitable for an investor who doesn’t plan to hold a given property for a long period of time.

An ARM also allows the investor to take advantage of downward trending interest rates in the future. On the flip side, the investor is exposed to future increases in interest rates, which raises the investment’s level of risk.

The Author: Chris Smith is a real estate investor, founder of an online reference for investors and real estate professionals and has published articles in Corporate Finance Magazine, Euromoney, and the Business Journal Network. More about Chris Smith.

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