The Upside to Adjustable-Rate Mortgages
Most Adjustable-Rate Mortgages (ARMs) are originated with a fixed interest rate that lasts a few years before it becomes variable, then typically change once every 12 months. But now, more jumbo borrowers are sticking with their adjustable rates after the initial fixed-rate period ends rather than refinancing into a new loan. The savings over time can be significant, since variable rates have been lower than the fixed rates a homeowner who refinanced would get. And since they’re no longer refinancing, they don’t have to pay closing costs.