Talking Points …
- Adjustable-rate mortgages (ARMs) now represent 6.5 percent of mortgage applications nationwide, which shows they are becoming more appealing to borrowers. A year ago, only 4.2 percent of mortgage applications nationwide were for ARMs, according to the Mortgage Bankers Association.
- These types of loans can carry more risk for the borrower, but initial rates are lower than those on fixed-rate loans. Rates may rise after an initial period of fixed interest. That being said, there is a lifetime cap that limits ups and downs.
- A 30-year fixed-rate mortgage averaged 4.51 percent as of August 29, while a five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.24 percent, according to Freddie Mac’s Primary Mortgage Market Survey.