Home buyers considering ARM loans
CREATED Jul. 8, 2013
Mortgage rates are on the rise again, and that's got some potential homeowners considering an adjustable-rate mortgage.
Known as an ARM, it's a loan that comes with an interest rate that periodically changes, meaning your mortgage payment can increase. The Mortgage Bankers Association says ARM applications make up seven percent of all loan applications.
Before deciding on an ARM, the Consumer Financial Protection Bureau says to consider whether your income can cover a higher payment, if rates go up. Will you have other debts in the future? How long will it be before you sell the home? And do you plan to pay the loan off early?