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Yearġ Mortgage Bankers Association "Chart of the Week: Adjustable-Rate Mortgage (ARM) Loan Trends.” 2,3Freddie Mac weekly Primary Mortgage Market Survey. Between 20, adjustable-rate loans never made up more than 10% of the mortgage market. As a result, homeowners largely avoided them over the last decade. However, they were also riskier for borrowers.īefore the housing crash, ARM loans did not have the same protections they do now.
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>Related: Perks and pitfalls of adjustable-rate mortgages in 2022 Adjustable-rate mortgage trends over timeĪdjustable-rate mortgages were hugely popular prior to 2008, at one point making up over a third of the total mortgage market. But if an adjustable-rate loan works for your financial situation, you could have a much better shot at affording a home in today’s market. If you plan to stay in your home longer than 10 years, an ARM might not be the best choice. Alternatively, you could afford a much nicer, more costly home with the same payments you’d make on a smaller, fixed-rate mortgage. So you could save a small fortune in monthly payments by opting for an ARM, at least over the first five to 10 years of your loan. Other common options include a 7/1 or 10/1 ARM, meaning your initial rate is fixed for 7 or 10 years before it can adjust. Source: Freddie Mac Primary Mortgage Market SurveyĪ 5/1 ARM means the mortgage has its initial fixed rate for the first five years and then the rate can adjust once per year for the remaining 25 years.