Mortgage Market~Adjustable-Rate Mortgages

ARMs (Adjustable Rate Mortgages): Most of the troubles in the current mortgage market are the result of adjustable-rate mortgages, which often feature very low introductory interest rates. Once the rate adjusts after 2 to 3 years, many homeowners can’t meet their monthly payments.

Nearly 2 million homeowners have ARMs that will adjust higher by the end of 2008. Of those, the Federal Housing administration estimates that 500,000 could go into foreclosure.—-Buyers, my advice to you is to understand the type of mortgage you are getting.