With an adjustable rate mortgage, the interest rate and monthly payments can change as interest rates change. The rate is fixed initially and is subject to adjustment based on changes in the index associated with this product. The most common indexes are the Constant Maturity Treasury (CMT), the London Interbank Offered Rate (LIBOR), and the Cost of Funds Index (COFI). The big benefit to the borrower is that usually ARMs have interest rates (at least initially) that are lower than the rates on fixed rate mortgages. Sometimes it can even be 1% to 2 % less.
If you anticipate your income will increase in the future or if you plan on staying in your home for seven years or less, an Adjustable Rate Mortgage (ARM) may be a great option for you.
Features:
- 3-year, 5-year, 7-year, and 10-year fixed rate periods
- No pre-payment penalties
- California properties: primary residences, second or vacation homes, 1-4 unit dwellings
- Conforming loan amounts up to $417,000
- Jumbo loan amounts to $2,000,000
Additional information on the options:
Rates and terms subject to change without notice. Additional conditions may apply.
