Industry News

Adjustable-rate real estate loan popularity climbs

First-time home buyers more likely to choose ARMs

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Nearly a third of mortgage applicants who shop online chose an adjustable-rate mortgage between February and September of this year, according to the latest Bankrate consumer focus survey. The survey showed that 31.9 percent of mortgage applicants received an ARM during the latest survey period, compared with 24.1 percent for the December 2003 to March 2004 survey period as well as the August to November 2003 survey period. The latest survey involved 6,982 consumer respondents who were looking for mortgage lenders and agreed to answer questions while visiting the mortgage pages at Bankrate.com. The latest survey also showed that first-time home buyers are 52 percent more likely than others to choose an ARM. They also are likely to be between the ages of 25 and 34, have no children and are more likely to approach institutions they are familiar with or that have been recommended. Interest rate and closing costs were cited as the most important criteria in choosing a mortgage lender. Fi...