Adjustable-rate mortgages, one of the products that helped precipitate the housing crisis in 2008, are on the rise again, reports the Wall Street Journal.
The premiums for adjustable-rate mortgages can spike after a few years, explains WSJ.
Banks insist that this time the products are safer, as they’re loaning to borrowers with strong credit. In a low interest rate environment, the adjustable-rate mortgages are more affordable than fixed-rate ones, but if interest rates rise, as predicted, in the short term, their costs will rise.
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