ARMs generally have the lowest possible mortgage rate. In fact, 7/6-month ARM rates may have significantly lower rates than a 30-year fixed rate mortgage. The 7/6-month ARM rate would be fixed for seven years, potentially saving you in interest expense that you could use, for example, to pay off credit card debt, or add to your retirement savings.
If you plan to sell your home before the loan adjusts, you may save money versus a fixed-rate loan. For example, if a job transfer is likely, an ARM would be a better solution than a higher rate, 30-year fixed-rate mortgage. The lower initial rate of an ARM can be a good strategy for mobile professionals, homeowners who plan to upsize or downsize, and anyone who will live in their home for the short term.
By applying for an ARM, you may qualify for a higher loan amount and can buy a more valuable house.