With mortgage rates on the rise in recent weeks, some home buyers are already being priced out because of the uptick — leading some to reconsider riskier mortgage products than the popular 30-year fixed-rate mortgage. After all, other mortgage options still offer lower rates at the moment, and their popularity likely will grow as fixed-rate mortgages continue to rise.
The adjustable-rate mortgage has the stigma of being blamed for the housing crash, when lenders were offering “creative” ARMs, like no down payments, low teaser rates, or interest-only payments and loans that actually grew over time (known as negative amortization). New mortgage regulations have cast most of those products as now illegal. But ARMs are still on the market, and some financial experts say they can be low-risk.