<prompt> Human: Little back story here - I am debt free except a rental house I have in Colorado. In 2011 we had a big loss on our taxes because we had major water problems at that house, which resulted in showing an annualized loss on our taxes.Now for our underwriting purposes, the mortgage company is showing our Debt-To-Income is too high to afford payments on a 30 year loan at 4.35, but we could get a 7 year ARM at 3.5. The house is 260,000 - Ill be putting down 52,000 plus closing costs of 3500 or so.  <response>: Let me put it to you this way. The ARM is an adjustable rate...how many times during the term of your mortgage do you think that rate is going to adjust DOWN any? Prolly about as many times as Congress has said nay to giving themselves a raise. 