During the mortgage crisis, the vast majority of jumbos were adjustable-rate mortgages and hybrid adjustable-rate mortgages, which started at low fixed rates and switched to adjustable interest rates at the end of a set time period typically of five, seven or 10 years, said Keith Gumbinger, vice president at HSH.com, a mortgage-information website.
For a long time, financial experts have recommended fixed rate mortgages over adjustable rate mortgages.
Mortgages can come with fixed, variable and adjustable interest rates, and typically offer longer terms of repayment than home equity loans.
Loans from any of these sources can come in a number of flavors, including fixed interest rate or adjustable interest rate, and with various terms, from 5 years for some adjustable-rate loans up to 40 years for some.
Series I bonds consist of two components: a fixed interest rate return and an adjustable inflation-linked return, making them somewhat similar to TIPS. The fixed rate never changes, but the inflation return rate is adjusted every six months and can also be negative (which of course brings your total return down).
When you borrow to invest, you must choose between an adjustable or a fixed-rate mortgage.
Damon Daniel, an organiser, says none of the 16 who applied got a write-down, though some might have their mortgages converted from an adjustable to a fixed interest rate.
She bought the home with an adjustable rate loan that was fixed for just the first two years.
The CFPB is concerned that some loan officers may be promoting fixed-rate, lump-sum reverse mortgages over adjustable-rate loans.
WSJ: Rethinking Reverse Mortgages, Part 2: Pitfalls and Dangers
When interest rates were higher, there was risk that an adjustable rate mortgage, offering a rate slightly lower than fixed rate mortgages, would shoot up in the future.
FirstFed's main product: option adjustable-rate mortgages, those that jump in rates to unaffordable heights following low fixed ones.
Under the first phase of Ohio's program, borrowers will meet certain income guidelines will be able to ditch their adjustable rate mortgages or other high interest rate loans and get into a 6.75 percent fixed rate mortgage.
While most HECM reverse-mortgage options carry adjustable rates and offer a line of credit or annuity-like payouts over time, the sole fixed-rate HECM choice is available only with a lump-sum payout.
WSJ: Rethinking Reverse Mortgages, Part 2: Pitfalls and Dangers
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