Risk-aversion among mortgage borrowers. Is that so wrong?

A wide swath of borrowers today may be paying far too much on their home loans, simply because they are overly cautious. Why?

CNBC correspondent Diana Olick checks out mortgage trends and concludes that since more than nine out of 10 mortgage borrowers are opting for fixed-rate mortgages-- paying up to a percentage point higher in interest rates on their loans than if they'd selected an adjustable rate offering--fear is costing people more. She writes:

"I think it's just fear and the nightmare, I mean, you remember the exploding subprime adjustable-rate mortgage," said Mark Zandi, chief economist at Moody's Analytics. "That was at top of mind just a few years ago, and so it's going to take a while before people really get over their fear and buy into the idea that an ARM might be a good deal for them."

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