Question 1

How long does the fixed period last on an ARM?

Accepted Answer

Common options are 3, 5, 7, or 10 years fixed before the rate adjusts. A 5/1 ARM means five years fixed, then adjusts once per year after.

Question 2

How much can my rate increase at adjustment?

Accepted Answer

Most ARMs have caps — typically 2% per adjustment and 5% lifetime. Your loan docs will spell out exact caps before you sign.

Question 3

Does an ARM make sense in El Centro right now?

Accepted Answer

If your timeline is under seven years, an ARM likely saves you money. Rates vary by borrower profile and market conditions.

Question 4

What index do ARM rates adjust to?

Accepted Answer

Most conventional ARMs use SOFR as the index. Your rate equals SOFR plus a fixed margin set at closing.

Question 5

Can I refinance out of an ARM before it adjusts?

Accepted Answer

Yes. Many borrowers refinance into a fixed loan before the adjustment kicks in. Your options depend on rates and equity at that time.

Question 6

What credit score do I need for an ARM in El Centro?

Accepted Answer

Lenders require a 620 minimum. Scores above 700 get meaningfully better pricing on the initial rate.

ARM Loans in El Centro: Lower Rates, Smarter Timing