Time to consider an Adjustable Rate Mortgage
As 30-year mortgage rates (FRM) continue their recent vertical ascent, it is worth considering an Adjustable Rate Mortgage (ARM).
Here are the latest rates:
ARMs got a bad name in the boom that contributed to the Great Recession, but as in so many different situations, that was the result of lax – or no – underwriting standards – think liar loans – and loans with adverse features such as negative amortisation – payments so low, initially, that the loan balance increased over time.
All that changed with the passage of the Dodd-Frank Act in 2010.
Indeed, the changes in that Act, which imposed limitations on the types of mortgages issued and put the onus on lenders to issue mortgage their customers understood and could afford, are one of the reasons many industry experts do not believe that the current housing market is in a bubble. The strength of the market is due to excess demand rather than access to easy money for unqualified buyers.
According to the National Association of Realtors, about 43% of home buyers assume that they will stay in their homes for at least 16 years, but many people vastly overestimate how long they will spend in their first home. In fact, over 60% of homeowners under the age of 38 stayed in their home for less than 8 years!
ARMs are a sensible option for those who understand how they operate and can consider them as part of their overall financial planning. And it is possible to get 7-year ARMs rather than the more common 5-year, giving a longer period when the initial rate is fixed.
And read these recent articles:
The Federal Reserve and Mortgage Rates
Federal Reserve: “Make me responsible…. but not yet”
Marblehead’s disappearing Inventory
Is Real Estate seasonal?
Can the Federal Reserve prevent a Recession?
How Marblehead’s 2022 Property Tax Rate is calculated
Essex County 2022 Property Tax Rates: Town by Town guide
Guide to Buying and Selling in Southwest Florida
If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, please contact me on 617.834.8205 or firstname.lastname@example.org.
Andrew Oliver, M.B.E.,M.B.A.
Market Analyst | Team Harborside | teamharborside.com
“If you’re interested in Marblehead, you have to visit the blog of Mr. Andrew Oliver, author and curator of OliverReportsMA.com. He’s assembled the most comprehensive analysis of Essex County we know of with market data and trends going back decades. It’s a great starting point for those looking in the towns of Marblehead, Salem, Beverly, Lynn and Swampscott.”
Andrew Oliver, M.B.E., M.B.A.
Real Estate Advisor
800 Laurel Oak Drive, Suite 400, Naples, FL 34108