[Displaced Flames fan]

I guess we got lucky.

We live in an area with low housing costs. Now, after the bubble, we are in one of the few areas in the country where home values have risen over the past few years.

We took out an ARM...but we were smart about it. It was a 5 year ARM with a 1% annual max adjustment that was fixed to the prime rate (through a slightly more complex formula). Our initial interest rate was 3.75%. Worst case scenario, we maxed the adjustment each year until the rate set at 8.75%. At the time we took out the loan, 2003, that wasn't a bad interest rate to end up with. As it turns out, we are locked in at 5.125% for the rest of the mortgage. Our interest rate actually went down 1% in the final adjustment period.

We made out pretty good. Now if only real estate prices in the Flathead would drop enough to make it affordable to move back home.