Question 1

What does the 7/1 in a 7/1 ARM mean?

Accepted Answer

The rate is fixed for 7 years, then adjusts once per year after that. The adjustment follows a market index plus a lender margin.

Question 2

Can I refinance before my ARM adjusts?

Accepted Answer

Yes. Many borrowers plan to refinance before the fixed period ends. Approval depends on rates and your finances at that time.

Question 3

Do ARMs work for Bishop investment properties?

Accepted Answer

They can, especially short-hold rentals. Portfolio ARMs give investors more flexibility than standard conforming products.

Question 4

What are rate caps and why do they matter?

Accepted Answer

Caps limit how much your rate can increase. A 2/2/5 cap means your rate can't jump more than 2% in any single adjustment or 5% total.

Question 5

Is an ARM riskier than a fixed loan in a rural market?

Accepted Answer

The risk isn't rural vs. urban — it's time horizon. If you plan to stay 20+ years, a fixed loan is safer. ARMs suit shorter timelines.

ARM Loans in Bishop, CA — Lower Rates, Real Trade-offs