The Minneapolis Star Tribune recently ran an article on adjustable rate mortgages (ARMs still have legs, but aren’t runaway favorites). Traditional ARMs, they state, are morphing into something new, something less risky, and something that better suits today’s homebuyers.
Today fixed-rate loans are priced just slightly above one-year Treasury-indexed adjustable-rate loans. So the incentive is low to buy into traditional 1-year contracts. Now the top adjustable mortgages are all hybrids — essentially 30-year loans that come with a fixed rate for the first three, five or seven years. After the fixed-rate period is over, the loan morphs into a one-year adjustable that floats with market rates, up or down.
Check out the Star Tribune for more information or talk to an exclusive home buyer agent. We make it our business to help you make the right buying decisions and we can even help you find a mortgage broker.