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ARMs Making A Comeback

Adjustable rate mortgages are making their way back into the mainstream. Year-over-year totals have jumped almost 65 percent.

The Washington Post reported in December 2018, 9.2 percent of all new mortgage loans had an adjustable rate, up from 8.9 percent in November and a far above the 5.6 percent of mortgages that were ARMs in December 2017, according to the Origination Insight Report from Ellie Mae. The number of ARMs in December 2018 was the highest share recorded since Ellie Mae began tracking loans in 2011.

As the Post story pointed out, today’s ARMs are typically hybrid products, which are 30-year loans with a fixed interest rate for a period of five, seven or 10 years, followed by an annually adjusted mortgage rate for the rest of the loan term.

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