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As little as 3% down required on some programs.
Adjustment periods each 6 months or 1 year.
Maximum Life caps of 5—6 % on most programs.
Periodic Adjustment caps vary from 1—2 %.
Choice of treasury, LIBOR and COFI indexes.
Assumable (credit qualification required).
Conversion option available on some programs.
Owner-occupied, second home and 1-4 unit properties.
Loan amounts up to $2 million.
For certain people in California, an ARM is the right mortgage loan. It allows you to fix the interest rate for the length of time that you plan to hold the loan without paying extra for interest rate protection you don't need.
The biggest advantages adjustable rate mortgages have is a lower initial interest rate. This gives you more buying power by allowing you to borrow more. A lender is taking less risk that interest rates will go up and they won't be able to raise your rate, they offer lower initial interest rates. This means a lower monthly payment, too. The initial interest rate on an ARM is fixed. The main difference among ARMs is the length of this fixed period. The shorter the initial fixed period, the lower your initial mortgage rate will be.
The disadvantages - your adjustable interest rate might go up.
If interest rates go up, and you stay in the house longer than expected, you may have to face larger mortgage payments.
Adjustable rate mortgages in California can save you money some times, even thousands of dollars over the course of your loan. Provide your loan officer with information to help you meet the exact criterion you request.
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