Thinking of buying or maybe refinancing your home? 3 On Your side has a warning.

Not very long ago adjustable rate mortgages (ARMs) were "the" way to go, but adjustable rate mortgages have really turned out to be a kick in the teeth.

But what you may not know is that adjustable rates are also causing mortgage companies to close down and that also has an effect on consumers.

"We could have ended up losing the house we wanted so bad to begin with," John Port said.

Memories of a Queen Creek home hit Port pretty hard.

"We probably lost $7,000 or $8,000," he said.

Recently, Port moved to Arizona and says he and his wife were looking to buy a home, but wanted to be more established first.

However, he did feel comfortable financing a Queen Creek home with an adjustable rate mortgage and that turned out to be the problem.

"We planned on using it short term and rolling it into a conventional," Port said.

Port said everything went smoothly. The seller even let the Ports move in before the close because the financing and everything that went with it seemed rock solid.

"We thought it was ours," he said. "We thought everything was ready to go. All of a sudden everything falls through."

Port said at the last minute, his lender backed out of the loan and the deal fell through.

The seller gave the couple a week to get out.

"With everything the way it went, we looked like flakes," Port said.

But according to Dean Wegner, a mortgage broker here in the Valley, lenders aren't financing the adjustable rate mortgages or ARM packages as much as they used to because it's just too risky for everyone involved.

"You had a crisis," Wegner said. "Twenty percent of all ARMs are in foreclosure right now, 10 percent of mortgages across the board are delinquent right now, 2-1/2 percent of mortgages are in foreclosures. There are a lot of problems going on in lending right now."

The problem, Wegner says, is adjustable rates eventually adjusted up, and homeowners couldn't afford their higher mortgage payment.

That meant homeowners lost their homes and mortgage companies had to take the homes back.

In the end, it's the mortgage companies who got burned.

"We have seen 50 percent of all our mortgage companies go out of business or restructure or eliminate 90 percent of its programs," Wegner said.

What this all means to you is that fewer lenders are vying for your business and if they do want your business, they'll most likely persuade you to take a 30-year fixed mortgage.

"It's the Cadillac of all loans," Wegner said. "There will be no surprises down the road."

As for Port, he says hindsight is 20/20. He now believes it would have been a gamble to have an adjustable rate mortgage and is glad his deal fell through. He's now licking his financial wounds, realizing it could have been worse.

"We lost the earnest money, but could have lost more if we stuck with the loan."

Lenders who have not shut their doors are trying to sell their adjustable rate mortgages to other companies.

They want to get rid of the problem, but no other lenders are buying the notes.