Long before the housing/financial crisis hit I was warning people against taking out adjustable rate mortgages. Inevitably people would email me and explain their circumstances and why they had an ARM which made sense. Some of them were probably right, or at least lucky enough that it worked out for them, but all of them essentially assumed that if there was any problem they'd just be able to refinance or sell and move and all would be fine. For many people that isn't going to be possible.
I don't claim perfect foresight in this. I thought we were in a housing bubble and I thought a lot of people were taking out loans which were stupid for them personally, but I had no idea that the banks had basically stopped having any kind of lending standards so that they were making loans which were stupid for them, too. But I do think the institution of the 30 year fixed rate no prepayment penalty mortgage is one of the few great things which are really on the consumers' side. It's a good deal. If rates go up, you're protected. If rates go down, you can potentially refinance. Sure it's tempting to shave a bit off an intro rate to save some money, but it's important to recognize that you're taking on a big chunk of risk when you do so. In an age where risk is being shifted back onto us as various forms of social insurance fade, it's a bit of a sanctuary.
