Adjustable-rate mortgages can go up or down as interest rates change. While such mortgages played a key role in the subprime meltdown, the subprime loanshave almost been wiped out of the market. Going forward, prime loans will make up the bulk of adjustable loans. ARMs make up a small share of the mortgagemarket, but they are being closely watched. If rates on adjustable loans jump, some borrowers may not be able to afford their monthly payments.
A Look Ahead To the Great Resetting Article | Take a look around the corner. Millions of adjustable-rate mortgages are going to reset in the coming years, possibly to higher interest rates, creating the prospect of a new round of foreclosures.