Approximately 5% of the fixed-rate mortgages acquired by Fannie Mae and Freddie Mac were over 90 days delinquent at some point before the end of 2009.
Approximately 10% of the adjustable-rate mortgages acquired by Fannie and Freddie were more than 90 days delinquent in the same period.
This data supports something we have been saying for years. You are more likely to fall behind on your mortgage payments if you use an adjustable-rate mortgage. “Adjustable” is the key part of that phrase. When you choose an ARM loan, you can be certain that the interest rate (and the size of your monthly payment) will change at some point. If you stay in the home beyond the first adjustment period, you will have two choices. You can try to refinance the mortgage, or you can simply deal with the rate change."
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