For me it would be the time value of money benefit, did something comparable, I borrowed against a HELOC to make another property purchase. I had other cash, but it was best to use the other cash for business purposes. 

There are other good reasons to consider an adjustable loan over fixed... relatively short ownership period, expected windfall in the near future to cover the debt, etc.

A good dialogue between a buyer and his/her/their loan agent.

  When prices are on the rise, and interest rates are climbing, and you only expect to live in the property for a couple of years.

It can be. I bought my house in 2003 and got a 5/1 Arm at 5.625%, about 1% lower than a fixed. The first adjustment it stay close to the 5.625% and after that I haven't paid more than 4.25% and spent a lot of time in the 3's. Never had to pay to refi.

I would speak with a trusted Lender ... but most often an adjustable rate mortgage is used when you are not planning to stay with this property very long ... And you can usually get a lower rate ... but remember, it's "adjustable" -- that means it can go UP or DOWN.

Great questions for a loan officer.

There are several circumstances where an adjustable rate would be advantageous because the starting rate is lower than a fixed rate. 

I've used that strategy effectively to save money when I knew I would be selling before the adjustment period. 

This is a good question to ask a loan officer to discuss based on your individual financial circumstances.

of course, you would discuss this topic with your lender, but in my opinion, it would be best if you definitely knew you would be staying at the property for a very short period of time....I'd get the lowest rate possible....

When it makes financial sense.

What Pete Xavier with AffordablePlan.org said.

When it best needs the needs of the borrowers. 

Nina has answered.

When you don't plan to live there longer than the fixed rate term of the ARM 

When you plan to reside or owe on the property for less than the number of years on the ARM.

We have interns who are buying and know they will only reside in Charlotte for a 2-4 year timeframe, will get a 5-year ARM to save significantly on the fixed interest rate.

When the borrower doesn't expect to be in the home much if any longer than the rate is set before the adjustments begin and the difference in rate is enough for the borrower to take the risk something will change. 

For example a 5/1, 7/1 or 10/1 ARM makes sense for someone living in the home for 5, 7 or 10 years or just slightly longer provided the rate difference compared to a 30 year fixed, is enough.  

Frankly, only a lender with complete file and rate sheet should advise the buyer. As Agents, we can listen, learn and support their choice or refer them to someone else if the information they are receiving is suspect. 

Wisdom not required.

Many great responses.

When you are likely to move in the first few years.

When rates are high and you expect the market to come back down and don't want to be stuck in a higher rate.

It's definitely a discussion to have with your lender, but if you know you are going to be selling the home before the adjustment time frame, it could be a benefit. But stuff happens.

For long term hold, never.

It is not for everybody, a loan officer would be the best to adivse about this.

Ask a lender for the pros and cons of this. A

When income is tight

As a lender, I have heard both sides of this discussion.  Some will "never" do an ARM,  and only a fixed rate, others love ARM's (typically the borrower who doesn't stay in one place for very long).

I have my opinion, but that is just me, I would say that its definitely a personal choice.   I know I will not be in my house for the duration, so I chose an ARM, because the rate (which in turn led to a lower payment) was just too good to pass up.  Now heres to hoping, with rates going up, that I don't have a change of heart... 

Lots of good answers and different points of view.

It's in the Blue Man manual

I do not advice about loan programs, that is between the buyer and their lender.

Two times:

• When interest rates are crazy high by historical standards (like the 30 is in the 7's or 8's). 
• When someone plans to hold the property for only a few years. They're pretty popular with investors that take their time to renovate (I've seen some that purchase the property, move in, fix 'er up and then sell after a two years).

Many reasons, one of them: if you are going to live at the property for many years and want your monthly payment to be the same. 

It is only better if you plan on being there less than 5 years. if not, get a fixed rate. 

Good to discuss with your lender and accountant.

Michael Jacobs nailed this one!

Yes if you are absolutely, positively, 100% sure, without a shadow of a doubt that you are going to move in 3-5 years .

Your length of ownership will be limited and you can take advantage of a lower rate.

When the rates are much lower and you plan to sell VERY soon. Otherwise, over a longer period you would be exposed to unpredictable, potentially much higher interest costs as the rate adjusts up.

It is a personal choice for the buyers.

For a condo/townhouse buyers, if they plan to live in the property for less than the term of the ARM, they should opt for ARM - my two cents.