A call to ARMs: adjustable rate mortgages in the 1980s
Adjustable rate mortgages, long-term loans that provide for interest rate changes at regular intervals over their lifetimes, have recently become a major source of residential mortgage financing in this country. Today adjustable rate mortgages probably account for close to 25 percent of total home mortgage debt. ; While adjustable rate mortgages (ARMs) have grown to be an important factor in mortgage lending, their variety and complexity have led to confusion. This article discusses their advantages and disadvantages to both borrowers and lenders, and highlights the nature of the risks involved. The author concludes that while lenders have enthusiastically embraced the concept of ARMs, borrowers have been reluctant in their response, forcing lenders to provide low initial interest rates and restrictions on interest-rate movements in order to sell their product.
Volume (Year): (1990)
Issue (Month): Mar ()
|Contact details of provider:|| Postal: 600 Atlantic Avenue, Boston, Massachusetts 02210|
Web page: http://www.bos.frb.org/
More information through EDIRC
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:fip:fedbne:y:1990:i:mar:p:47-61. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catherine Spozio)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.