The Increasing Popularity of the Adjustable Rate Mortgage
The popularity of the adjustable rate mortgage (ARM) is increasing following more than a decade of playing second fiddle to longer term mortgages.
The Mortgage Bankers Association noted in a release Wednesday morning that the share of total mortgage applications for adjustable-rate mortgages is approaching 12%. At the beginning of the year, when rates for long-term mortgages were still low, ARMs represented just 3% of total mortgage applications.
The biggest difference between an adjustable-rate mortgage and a fixed-rate mortgage is that with an ARM, your interest rate will change after a certain period, usually five or ten years. With a fixed-rate mortgage, your interest rate is locked in and your payment will be the same every month for the duration of the loan.
After an initial interest rate period, your lender will determine a new interest rate for an ARM, using calculations based on a measure of interest rates — like the constant maturity Treasury index or the Cost of Funds Index.
See other articles related to: adjustable rate mortgages
This article originally published at https://dc.urbanturf.com/articles/blog/the_increasing_popularity_of_the_adjustable_rate_mortgage/20188.
Most Popular... This Week • Last 30 Days • Ever
DC's homebuyer assistance programs can be a bit complex. This edition of First-Timer ... read »
In this article, UrbanTurf looks at the estimated annual maintenance costs associated... read »
Today, UrbanTurf is examining one of our favorite metrics regarding competition in th... read »
The residential development in the works along Florida Avenue NE is looking to increa... read »
Another concept has been unveiled for one of DC's most contentious development sites,... read »
- First-Timer Primer: DC's Home Buyer Assistance Programs
- What Are the Annual Maintenance Costs When You Own a Home?
- The 6 Places In The DC Area Where You Aren't The Only One Bidding On a Home
- 46 to 48: The Biggest Project In Trinidad Looks To Get Bigger
- A First Look At The New Plans For Adams Morgan's SunTrust Plaza
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro