Question 1

What happens when my ARM adjusts after the fixed period?

Accepted Answer

Your rate adjusts based on an index plus a margin, typically capped at 2% per adjustment and 5-6% lifetime. Most borrowers refinance or sell before the first adjustment.

Question 2

Can I refinance my ARM before it adjusts?

Accepted Answer

Yes, most borrowers refinance 6-12 months before adjustment. You need sufficient equity and qualifying income, so plan ahead rather than waiting until the last minute.

Question 3

How much lower are ARM rates compared to fixed rates in Lafayette?

Accepted Answer

ARMs typically start 0.5-1.5% below comparable fixed rates. On jumbo loans common here, that difference can save $1,000+ monthly during the initial period.

Question 4

What's the minimum down payment for an ARM in Lafayette?

Accepted Answer

Conforming ARMs start at 5% down. Jumbo ARMs typically require 10-20% down depending on loan amount and lender requirements.

Question 5

Should I choose a 5/1, 7/1, or 10/1 ARM?

Accepted Answer

Match the term to your timeline. If you'll likely move within 7 years, a 7/1 ARM works. Uncertain timelines favor longer fixed periods or fixed-rate loans.

Adjustable Rate Mortgages in Lafayette: Lower Start Rates for Contra Costa's Premium Market