We help California homebuyers take advantage of lower initial interest rates and flexible loan terms with an Adjustable-Rate Mortgage (ARM). An ARM can be a smart choice if you plan to sell, refinance, or move within a few years — allowing you to save money upfront and enjoy lower monthly payments early in your loan.
Adjustable-Rate Mortgage (ARM) in California
About
What Is an Adjustable-Rate Mortgage (ARM)?
An Adjustable-Rate Mortgage (ARM) is a home loan where the interest rate changes over time. It starts with a fixed rate for an initial period — typically 5, 7, or 10 years — and then adjusts periodically based on market conditions. Because of the lower introductory rate, ARMs can offer significant short-term savings compared to fixed-rate loans, especially for buyers who don’t plan to stay in the same home long-term.
You may qualify for an Adjustable-Rate Mortgage if you meet these general requirements:
- Credit Score: Minimum 620+, depending on loan type.
- Down Payment: As low as 5% for qualified borrowers.
- Debt-to-Income Ratio (DTI): Ideally below 45%.
- Stable Income: Consistent income for the past two years.
- Financial Flexibility: Comfortable managing potential rate adjustments.
- Property Type: Available for primary, secondary, and investment properties.
Benefits
Benefits of an Adjustable-Rate Mortgage
Lower Initial Interest Rate
Save money during the first 5–10 years.
Flexibility to Refinance
Refinance or sell before the rate adjusts.
Smaller Monthly Payments
Great for short-term homeowners or investors.
Qualification Ease
Lower initial payments may help you qualify for a higher loan amount.
Various Term Options
Choose from 5/6, 7/6, or 10/6 ARM options to fit your goals.
Potential for Rate Decrease
Your rate could go down if market rates drop.
Types
Types of Adjustable-Rate Mortgages We Offer
5/6 ARM
Best For: Buyers planning to move or refinance within 5 years
Highlights: Lowest starting interest rate
7/6 ARM
Best For: Mid-term buyers
Highlights: Fixed for 7 years, adjusts every 6 months after
10/6 ARM
Best For: Long-term buyers wanting stability
Highlights: Fixed for 10 years, then adjusts periodically
Jumbo ARM
Best For: High-value property buyers
Highlights: Flexible terms with large loan amounts
Comparison
ARM VS Fixed-Rate Loan
ARM
- Interest Rate: Starts lower, adjusts over time
- Initial Payment: Lower
- Rate Changes: After fixed period
- Ideal For: Short- or mid-term homeowners
- Refinancing Option: Yes, before rate adjustment
- Risk Level: Moderate
Fixed-Rate Loan
- Interest Rate: Stays the same for the entire term
- Initial Payment: Higher
- Rate Changes: Never
- Ideal For: Long-term homeowners
- Refinancing Option: Yes, anytime
- Risk Level: Low
FAQs
Frequently
Asked Questions
Still have a question?
JLLendingTeam: A collaborative group specializing in providing tailored lending solutions and financial support for clients.
How long is the interest rate fixed on an ARM?
Most ARMs have an initial fixed period of 5, 7, or 10 years, depending on your loan choice.
What happens when the rate adjusts?
After the fixed period, your rate may increase or decrease based on market conditions and the loan’s index.
Is an ARM a good option for first-time buyers?
Yes, if you plan to move or refinance before the first rate adjustment, an ARM can offer substantial upfront savings.
Can I refinance from an ARM to a fixed-rate loan?
Absolutely. You can refinance at any time to lock in a stable rate if market conditions change.
Still have a question?
JLLendingTeam: A collaborative group specializing in providing tailored lending solutions and financial support for clients.
JL Lending Team
Why Choose Us for ARM?
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Serving California’s veterans with deep knowledge of the state’s housing market.
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Ready to Get Started with an Adjustable-Rate Mortgage?
Enjoy the flexibility and savings that come with a lower initial rate through an ARM loan. Let JL Lending Team help you find the right mortgage option that fits your lifestyle and financial plan.
Start saving today with a flexible, short-term lending solution.