Associated Press – ALEX VEIGA
Adjustable-rate mortgages got a bad rap after the housing bust.
Many homebuyers used the low initial interest rates on adjustable loans to keep payments low, but weren’t able to afford to pay their mortgage when the loans reset to a much higher rate a few years later.
In the years since, banks have tightened their lending standards to ensure borrowers who get adjustable-rate loans, or ARMs, can afford a rate reset. And as interest rates have begun to rise, ARMs have become a more attractive option for homebuyers seeking the lowest rate on a home loan.
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