It is easy to get confused by all the first time home buyer mortgage options. Your mind may be spinning with words like “30 year fixed rates” and “jumbo loans” and “FHA loans.”

At some point, you’ve probably heard about an adjustable rate mortgage, or ARM, as well, but you may have been told to avoid it. If you have an ARM, your interest rate will adjust periodically according to current market conditions. Although an adjustable rate loan is not for everyone, there are times when it may be your best bet.

Here are our top three reasons to consider adjustable rates:

1. Lower Initial Monthly Payments

When you get an ARM, there is a fixed period of time – usually between three and seven years – during which your interest rate doesn’t change. This initial rate is lower than the rate of a 30 year fixed mortgage. This means your monthly payments will be lower as well. If you’re just starting out in a career and expect to earn more money as time goes by, the ARM may be a smart choice for you.

2. Just the Thing for a Starter House

An ARM may be your best option if you’re only planning to stay in your home for a few years before moving on to something bigger and better. The lower interest rate you’ll receive by choosing an adjustable rate loan allows you to build equity in your home quickly. You can sell your home and be long gone before the first rate adjustment.

3. Adjustments Are Not Always Bad News

Many people avoid adjustable rate mortgages because they are concerned that their interest rates will adjust up. This is certainly possible, but it is not a foregone conclusion. If mortgage rates go down, the rates associated with your mortgage will go down as well.

As you sort through your first time home buyer mortgage options, don’t automatically ignore the adjustable rate loan. You may find that the ARM is the best option available.