Question 1

What ARM terms work best in Orinda?

Accepted Answer

7/1 and 10/1 ARMs dominate here. The longer fixed period matches typical ownership timelines, and the rate discount still beats 30-year fixed mortgages by 0.5-0.75%.

Question 2

How much can my rate adjust after the fixed period?

Accepted Answer

Most ARMs cap initial adjustments at 2% and lifetime adjustments at 5-6% above the start rate. Review the margin, index, and caps—these vary significantly between lenders.

Question 3

Do ARMs require larger down payments?

Accepted Answer

No. Down payment requirements match fixed-rate loans—typically 20% for jumbos, as low as 3-5% for conforming ARMs with mortgage insurance.

Question 4

Can I refinance before my ARM adjusts?

Accepted Answer

Yes. Most Orinda borrowers refinance or sell before the first adjustment. Just ensure you have enough equity and income to qualify when rates change.

Question 5

Are ARMs riskier than fixed-rate mortgages?

Accepted Answer

They carry interest rate risk. If you can't afford the fully-indexed rate at lifetime caps, choose a fixed loan instead. ARMs work for planned short-term ownership.

Adjustable Rate Mortgages in Orinda: Smart Financing for Contra Costa's Premium Market