The post-recession rise of ARMs

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What types of loans are you most commonly seeing in your real estate market?

  • 30-year FRMs (51%, 23 Votes)
  • FHA loans (31%, 14 Votes)
  • ARMs (16%, 7 Votes)
  • 15-year FRMs (2%, 1 Votes)

Total Voters: 45

Despite the low rates being offered on fixed rate mortgages (FRMs), some homebuyers are still opting for a risky adjustable rate mortgage (ARM) with its temporarily lower interest rate. In the first quarter of 2011, ARMs comprised 7.8% of the California mortgage market, marking the highest market share of dicey ARMs since the housing market crash in 2008.

For those who plan to pay off their mortgage or move three to five years after they buy their house, an ARM can be an appealing money saver. For everyone else, however, the fixed-rate mortgage (FRM) remains the safest bet.

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