Adjustable Mortgages Are Making a Come Back

A client and his mortgage broker were embroiled in a bitter dispute a few months back. The client was interested in an adjustable-rate mortgage and his mortgage broker quoted rates for a fixed 30-year amortized loan. They argued back and forth. Finally, I had to intervene and tell the mortgage broker to just give the client what the client wants. To stop arguing.

Clients are smart enough to figure out if an ARM is right for them. Adjustable mortgages are not the evil product from the last decade. There are no option payments or less-than-interest payments available. They're pretty straight forward and, for some borrowers, they make a lot of sense, especially the ARMS that adjust in 5 or 7 years. Even the New York Times agrees with this premise. It reported that Bank of America closed twice as many adjustable-rate mortgages last month as it had the year before. ARMs are on the upswing again. They accounted for 10% of all of Bank of America's loans last month.

More Articles by Elizabeth Weintraub:

• What is an Index Rate?
  
• How to Time the Due Date of Your First Mortgage Payment
  
• Benefits of a Fixed-Rate Mortgage

Technorati tag: adjustable rate mortgage

_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}