Adjustable Mortgage Rush Isn't the Same as 2008
Loans with floating interest rates are more tempting as the cost of buying a home soars, but it doesn't augur another housing bust.
Now comes the mortgage.
Photographer: Daniel Acker/Bloomberg
Adjustable-rate mortgages are beginning to look good again. As the cost of owning a home continues to soar, more buyers are willing to take their chances with the floating interest rate that got so many borrowers in trouble when the housing market crashed in 2008. But don't worry, so far there’s nothing that alarming happening.
ARMs, as they’re popularly known, typically offer lower rates to start off than traditional 30-year fixed mortgages, but then bounce around with the market. While ARMs come in all shapes and sizes, the most common ones feature rates that reset annually based on the current market after five, seven or 10 years.