Don't get trapped in an ARM
June 2, 2011: 11:59 AM ET
Money magazine) -- They all but disappeared after the housing bust as homeowners grew fearful of future interest-rate hikes and rates for fixed loans fell to historic lows. But "the fear of the adjustable-rate mortgage has started to settle down," says Steve Habetz, a loan officer in Westport, Conn.And how. With 30-year fixed-rate loans now inching toward 5%, the number of borrowers taking adjustable-rate mortgages, which typically carry a low fixed rate for one to 10 years and then adjust annually based on current rates, has jumped 75% since last year.
Money magazine) -- They all but disappeared after the housing bust as homeowners grew fearful of future interest-rate hikes and rates for fixed loans fell to historic lows. But "the fear of the adjustable-rate mortgage has started to settle down," says Steve Habetz, a loan officer in Westport, Conn.
And how. With 30-year fixed-rate loans now inching toward 5%, the number of borrowers taking adjustable-rate mortgages, which typically carry a low fixed rate for one to 10 years and then adjust annually based on current rates, has jumped 75% since last year.
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