The share of adjustable-rate mortgage (ARM) applications increased for the week ending April 19, according to data from the Mortgage Bankers Association (MBA), as they jumped 7.6 percent of total home loan applications.
ARM home loans can be relatively risker than the 30-year fixed rate mortgage, analysts say, as their interest rate can change after the initial time period of the loan compared to the longer-term alternative.
They tend to charge less interest but can fluctuate depending on where overall market rates stand after a period of time, according to Rocket Mortgage. The move by buyers toward those loans for the week ending April 19 was an attempt to seek cheaper borrowing costs for their home loans, MBA pointed out.
A blank mortgage application form. Mortgage rates rose for the third consecutive week, lenders said. A blank mortgage application form. Mortgage rates rose for the third consecutive week, lenders said. Stock Photo/jayk7 via Getty Images
The Context
Mortgage applications fell 2.7 percent for the week ending April 19 as mortgage rates rose for the third consecutive week, depressing activity in the market.
Homebuyers Are Taking on Riskier Mortgages
