Question 1

What happens to my payment after the ARM adjusts?

Accepted Answer

Your rate and payment increase based on the index plus the lender's margin. Most ARMs cap adjustment at 1% to 2% per year. Call for your specific ARM's caps and adjustment schedule.

Question 2

Can I refinance before the rate adjusts?

Accepted Answer

Yes. Most borrowers refinance into a fixed rate before or shortly after the adjustment period ends. Refinancing requires a new appraisal and underwriting, but it's a common exit strategy.

Question 3

Is an ARM right for me if I'm staying in Oakland long-term?

Accepted Answer

Probably not. ARMs work best for buyers planning to move or refinance within five to seven years. If you want the same payment for 30 years, a fixed-rate mortgage is the safer choice.

Question 4

What credit score do I need for a Portfolio ARM?

Accepted Answer

Most lenders require 680 FICO or higher. Some portfolio programs accept 660 with compensating factors like larger down payment or strong reserves.

Question 5

How much down payment is required?

Accepted Answer

Portfolio ARMs typically accept 5% to 20% down. Larger down payments (15% to 20%) improve your rate and approval odds.

Portfolio Arms in Oakland: Adjustable-Rate Mortgages for Bay Area Buyers