Question 1

What's the typical rate difference between ARMs and fixed mortgages in Clayton?

Accepted Answer

ARMs run 0.5-1.0% below comparable fixed rates during the initial period. On a $1.2M loan, that's roughly $600-1,200 in monthly savings early on.

Question 2

Which ARM term makes sense for Clayton buyers?

Accepted Answer

7/1 ARMs work best for most Clayton purchases. They provide seven years of fixed payments, covering typical ownership periods in this market.

Question 3

Can I refinance my ARM before the rate adjusts?

Accepted Answer

Yes, most borrowers refinance 6-12 months before adjustment. You'll need sufficient equity and qualifying income at that time.

Question 4

Do ARMs require larger down payments than fixed-rate loans?

Accepted Answer

No. Conforming ARMs start at 5% down. Jumbo ARMs need 20% minimum, matching jumbo fixed-rate requirements.

Question 5

How much can my ARM rate increase at first adjustment?

Accepted Answer

Most ARMs cap first adjustment at 2% above initial rate. Lifetime caps typically limit increases to 5-6% total over the loan term.

Adjustable Rate Mortgages in Clayton: Lower Initial Rates for Contra Costa Buyers