|Adjustable rate mortgages quickly gaining popularity
(NAPS)—An increasing number of consumers are beginning to reconsider adjustable rate mortgages (ARMs). For many, it can be the best option when it comes to financing a house.
With interest rates moving higher, ARMs have burst back on the scene, offering low rates now and the certainty of a fixed rate for as many as 10 years. This is especially enticing to many Americans who don’t anticipate being in their home for longer than a decade.
Who Benefits From An ARM
Industry experts suggest there are four groups in particular who should give the mortgage program a serious look:
• First-time home buyers who are looking for a starter house for now but have their sights set on a larger home to start a family within the next five to 10 years.
• Career mobiles who relocate regularly for their work.
• Empty nesters or those who plan to downsize once their children have moved out of the house in the near future.
• Financially savvy consumers who regularly follow the housing market and trends, and know what to look for and when to pull the trigger on a refinance.
“Adjustable rate mortgages have been used by many consumers very successfully for decades,” said Bob Walters, Chief Economist at Detroit-based Quicken Loans. “When looking at home loan options, consumers should discuss their financial situation and future goals with their mortgage banker or financial planner to make sure they choose the best home loan option for their specific needs. There is no one-size-fits-all answer.”
Walters also points out that the average life of a loan is five to seven years and that most Americans stay in their home for 10 years or less.
While fixed rate mortgages can appear as the default choice for many, considering today’s rising rates and the fact that very few mortgages survive more than 10 years, consumers should carefully weigh their options. Tens of thousands of dollars could be riding on it.
You may be able to find out which loan is best for you at www.quickenloans.com.