Adjustable-rate mortgages, blamed for fueling the 2008-09 financial crisis, are making a comeback, but gone are the ultralow teaser rates and lax lending requirements
Gone are the ultralow teaser rates and lax lending requirements. Today’s ARMs are safer and so are borrowers.
The nascent resurgence of adjustable-rate mortgages, blamed for fueling the 2008-09 financial crisis, is a sign that rising interest rates are squeezing home buyers.A jump in interest rates has revived demand for adjustable-rate mortgages. But these loans bear little resemblance to the ones blamed for fueling the 2008-09 financial crisis.
Applications for ARMs, a kind of mortgage that carries a lower rate in the loan’s early years, more than doubled in April from a year earlier, according to the Mortgage Bankers Association. More than 9% of mortgage applications submitted last week were for adjustable-rate mortgages, up from 4% a year ago.
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