By Kenneth R. Harney, Special to the Times
Thursday, January 27, 2011
Hybrid adjustable mortgages a good choice for some borrowers
WASHINGTON — After years of virtual exile from the home loan arena, is the adjustable-rate mortgage staging a quiet comeback? Could an ARM be on your shopping list the next time you need to buy a house or refinance?
You might be surprised.
A new survey of 112 lenders by mortgage giant Freddie Mac found that ARMs are starting to attract applicants again. Adjustables accounted for just 3 percent of new home loans in early 2009, but are projected to be the final choice for nearly one out of 10 borrowers in 2011. In the jumbo and super-jumbo segments, the share will be even larger, according to Freddie Mac chief economist Frank Nothaft.
How could this be, with fixed 30-year rates at half-century lows, hovering just under 5 percent? Isn ...