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Adjustable-rate mortgages are making a comeback.
With interest rates surging, more buyers are turning to ARMs, which offer lower initial rates than fixed-rate loans. However, after a certain period, the rate on the ARM adjusts to reflect current market conditions.
“You have double the number of borrowers out there applying for ARMs in the last four months because of how quickly the rates have come up,” said Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association.