It's called an adjustablerate mortgage, known in the trade as an option ARM.
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They can also offer an adjustablerate mortgage which includes both a fixed and variable rate.
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Less than a handful of securities backed by adjustablerate mortgages were sold during the month.
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Well, the adjustablerate mortgage... it adjusted.
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He is especially concerned about the resetting of adjustablerate mortgages, which will mean bigger monthly payments for borrowers.
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While adjustablerate mortgages see higher monthly costs when rates rise, variable rate mortgages typically come with fixed monthly payments.
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Many borrowers who took out low "teaser" adjustablerate mortgages are facing resets, often at vastly higher rates.
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Some lenders, such as Countrywide, aren't charging any less for adjustablerate loans than they are for fixed rate loans.
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Kelly and David Graham of Westminster, Massachusetts, refinanced their home in 2003 with an adjustablerate mortgage from Ameriquest to consolidate their debts.
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HSBC Chief Executive Michael Geoghegan said most of his company's problem was in U.S. subprime mortgages, particularly for adjustablerate mortgages and second-lien loans.
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These were adjustablerate mortgages-loansthat would see interest rates fluctuate over time-thatallowed borrowers to choose how much they would pay each month.
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A move like that can seem appealing, because banks promise that switching to an adjustablerate can save hundreds of dollars a month now.
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Many Americans with good credit but low income or no savings signed up for adjustablerate mortgages or interest-only loans to get into the market.
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Option adjustablerate mortgages (or option ARMs) typically let borrowers choose a monthly payment, but instead of paying down mortgages they often paid interest-only.
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Fixed mortgage rates rose marginally, while adjustablerates slipped in the week ended June 17.
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Libor has existed since the 1980s, when banks developed it as a benchmark for adjustablerates on corporate debt.