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Adjustable Rate and Alt-A Mortgages - are they next?

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apapunas
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Posts: 49


« on: May 12, 2009, 09:15:21 am »

Hey, I heard about the next problem in the real estate market.

Adjustable Rate Mortgage (ARM)
Alt-A Mortgage

The real estate bubble bursted with the subprime mortgages going sour. I read some articles on the looming problem with the ARM and Alt-A mortgages. What do you think about it? Are they the next apocalypse?
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« on: May 12, 2009, 09:15:21 am »

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michelle170
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Posts: 1


« Reply #1 on: September 23, 2010, 03:11:16 am »

Adjustable rate mortgage or ARM is a mortgage with an interest rate that may change, usually in response to changes in the Treasury Bill rate or the prime rate. The purpose of the interest rate adjustment is primarily to bring the interest rate on the mortgage in line with market rates. The mortgage holder is protected by a maximum interest rate (called a ceiling), which might be reset annually. ARMs usually start with better rates than fixed rate mortgages, in order to compensate the borrower for the additional risk that future interest rate fluctuations will create.

« Last Edit: October 06, 2010, 08:57:10 am by michelle170 » Logged
apapunas
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Posts: 49


« Reply #2 on: September 23, 2010, 03:40:28 pm »

Ya, that is the point. High interest rates, highly volatile, there is a great amount of ARMs that can suddenly shoot up. What impact will it have on the economy?
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hamburg113
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Posts: 4


« Reply #3 on: December 31, 2011, 02:32:06 pm »

Hi

I found that a member asked same question in this forum some months ago.

Pls use search box to find this questions with comments
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