It's an adjustable-rate loan market today. But just what kind of adjustable-rate product is selling?

Centerbank. Mortgage, based in Waterbury, Conn., is finding its five-year adjustable-rate home loan popular, said Thomas C. Brown, president and chief executive. Such loans do not adjust until after the fifth year.

Mr. Brown said 25% of Centerbank's loans are still fixed-rate mortgages, down significantly from this time last year.

ARMs are also hot at NVR Mortgage, Pittsburgh. President William J. Inman says it's simply a rate issue.

In Mr. Inman's marketplace ARMs - even standard one-year adjustables - are being priced in the high 4% area. That's in contrast to middle 8% for fixed-rate loans.

Some lenders say the most fashionable loan in California is the adjustable pegged to the 11th district cost-of-funds index.

Brooksamerica Mortgage Corp., Santa Ana, Calif., started offering borrowers a Libor-linked loan with a starting rate of 3.75% that adjusts quarterly.

"That will give the cost-of-funds loan a run for its money," said Michael Brooks, president and chief executive officer.

Mr. Brown of Centerbank expects more Libor-based loans, mainly found on the West Coast, to soon be more available in the East.

The "plain old boring" one-year adjustable-rate mortgage is the hottest ARM at AIB Mortgage Co. in Miami, said an executive vice president, Aristides J. Sastre.

Mr. Sastre said that in the past borrowers Wanted the option to convert their adjustable-rate loans to fixed-rate mortgages. No longer.

He said the refinancing boom of the last two years convinced borrowers that convertibility was unimportant; they could do it themselves inexpensively.

Lenders say home loans to borrowers who aren't up to agency standards is increasing. Of the $12 million worth of loans that Unitower Mortgage Corp., Miami, is now originating per month, 10% are B or C quality loans.

That's a higher proportion than in previous months, said Tina L. Bower, president and chief executive officer.

But Ms. Bower emphasized that Unitower's six-month Libor is the best seller.

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