Mortgage rates have been heading higher since the presidential election, and they are already pricing some buyers out of the housing market.
There is a way to get some of those buyers back in, if they are willing to take a little risk.
The average rate on the popular 30-year fixed is at its highest in two years, but other mortgage options offer lower rates, namely, adjustable rate mortgages. These so-called ARMs still carry the stigma of being the villains of the housing crash. Lenders offered all kinds of "creative" ARMs then, some with no down payments, crazy-low teaser rates, interest-only payments and loans that actually got bigger as time went on (negative amortization).
Most of these products are now illegal under new mortgage regulations, but ARMs are still around, and they can be the right product for a lot of borrowers. They can, in fact, be very low risk.
"These aren't the ARMs of the past," said Mat Ishbia, president and CEO of United Wholesale Mortgage. "It's not any more difficult for a borrower to qualify for an ARM than a fixed rate mortgage, as long as the term of the ARM is over five years."