So how can I decide between a fixed-rate mortgage loan and an ARM?

Both types of home loans have their pros and cons and the answer depends a little on your financial situation and a little on your personality.

• Choose a fixed-rate mortgage if you want the security of always knowing what your rate and monthly payment will be (and you don’t mind that your rate may sometimes be higher or lower than the going market rate).
• Choose an ARM if you think you’ll have more income in a few years so you want a lower, fixed rate right now to help you get off to a good start (and you don’t mind when your rate and payment start adjusting).