ARMed and Hopefully Less Dangerous (Maybe?)

Remember adjustable-rate mortgages? Well, they aren’t just for poor people anymore.

Financial groups are sweetening terms to entice customers to take out these loans, known as ARMs, whose rates can jump after a few years. Some ARMs are cheaper, when compared with fixed-rate mortgages, than they have been in more than a decade.

The tactics are reminiscent of the period before the 2008 crisis, when ARMs exploded in popularity as banks and mortgage brokers touted their low initial rates to consumers.

Now, though, financial executives say they are focusing on borrowers with strong credit who are using the loans to take out large “jumbo” mortgages—and not so-called subprime borrowers, who used the loans to stretch their buying power as far as it could go….

On mortgages of more than $1 million, 61% were ARMs, up from 56% a year earlier.

Adjustable-Rate Mortgages Make a Comeback [WSJ]

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6 Responses to “ARMed and Hopefully Less Dangerous (Maybe?)”

  1. Ex DB eMployeR says:

    Face it. Busybody female co-workers are notorious for calling out “bad behavior” that never even occurred. The “retaliation” they endure is in fact, revenge.

  2. Guest says:

    Funny, banks think they are one-upping the consumer because they think rates can go nowhere but up. They are only half right though. Rates are going nowhere.

  3. Alice says:

    Nice stuff of information keep it update us.