Should you consider an adjustable-rate mortgage? | North Salem Homes

It’s getting harder for many first-time buyers to afford a home in many markets across the country. The average rate on a 30-year, fixed-rate mortgage has climbed 16% in the past year, at the same time that the median home price shot up 14%.

In the past couple of months, lenders say, buyers looking to lower their monthly payments have started inquiring about adjustable rate mortgages, those riskier mortgages often blamed for the housing bust.

“We are definitely seeing more interest in ARMs,” says Malcolm Hollensteiner, director of retail lending for TD Bank.

Can they be trusted this time around? Who should consider these loans, which vary in rate after an initial fixed period? And who should stick with the standard 30-year fixed-rate loans?

In this September installment of Buying Advice, we’ll school you on the pros and cons of today’s adjustable-rate mortgages, check in with the latest housing statistics and help you understand origination fees when shopping for a mortgage.

 

 

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