GMAC Mortgage Corp. announced that it has expanded the range of adjustable-rate mortgage programs available with down payments as low as 5% on loan amounts up to $300,000.
Adjustable-rate mortgages are once again a popular choice because their low starting rates let homebuyers borrow more than a fixed rate loan would allow.
"The biggest obstacle for people who want to purchase a home is saving cash for the down payment and closing costs," said Patrick Sheehy, managing director of residential lending for GMAC Mortgage. "There have been many low-down-payment loans offered to answer that need, but not a lot of options in the types of loans. We think that combining a low down payment with several ARM products will give people more flexibility."
The company said ARMs now account for nearly 50% of its loan production.
The new products include a six-month adjustable, an ARM which is fixed for the first three years then adjusts annually, and a 10/1 ARM that adjusts annually after the first 10 years. The company also offers a one-year ARM and fixed-rate programs with a 5% or smaller down payment.