ARM borrowers match loans to their uncertainty tolerances
Article Abstract:
More borrowers are availing of adjustable-rate-mortgage (ARM) products that feature longer initial-adjustment periods. This growing borrower preference for products that neutralize the unpredictability of the ARM has led to a broader array of ARM alternatives. This was confirmed by the 15th annual ARM survey conducted by the Federal Home Loan Mortgage Corp. The survey showed that longer-term alternatives such as the 5/1, 7/1 and 10/1 ARM are now being offered by mortgage lenders eager to allay borrower concerns about interest rate trends.
Publication Name: Secondary Mortgage Markets
Subject: Economics
ISSN: 0740-4271
Year: 1999
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All about ARMs
Article Abstract:
The US Federal Home Loan Mortgage Corp's survey on adjustable-ratemortgages (ARM) revealed that teaser-rate pricing is fast becoming a dying practice. The study, which covered 121 lending insitutions, examined 1-year and3-year ARMs with respect to its initial period rate, points, margin, fully indexed rate, initial period discount, and fixed-rate mortgage/ARM spread. The differences in ARM rates between lenders suggests that ARM borrowers may avail of lower rates if they do some shopping prior to choosing an ARM.
Publication Name: Secondary Mortgage Markets
Subject: Economics
ISSN: 0740-4271
Year: 1993
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