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Adjustable Rate Mortgages (ARMs) in San Fernando
San Fernando buyers face Los Angeles County pricing without the Beverly Hills price tags. ARMs let you capture lower initial rates when you're not planning to stay 10+ years.
Most San Fernando borrowers I work with use 5/1 or 7/1 ARMs to maximize buying power early. The initial fixed period covers typical ownership spans in this market.
You need 620+ credit for most ARM programs, though 680+ gets you the rate discounts that make ARMs worthwhile. Lenders typically require 5-10% down for conventional ARMs.
Your debt-to-income ratio can't exceed 43% for qualified mortgages. Lenders qualify you at the fully indexed rate, not just the teaser rate, so approval is actually stricter than fixed loans.
Not all 200+ lenders in our network offer competitive ARMs. About 30 have strong programs, and maybe 8 consistently win on rate for San Fernando deals.
Credit unions often beat banks on ARM margins—the percentage added to the index when your rate adjusts. A 2.25% margin versus 2.75% saves you thousands over the loan life.
I steer San Fernando clients toward 7/1 ARMs over 5/1s right now. The rate difference is minimal, but two extra years of stability matters if life changes your timeline.
Check the adjustment caps before you sign. A 2/2/5 structure limits increases to 2% at first adjustment, 2% each period after, and 5% lifetime. Some lenders offer 5/2/5, which protects you better.
ARMs typically start 0.50-0.75% below 30-year fixed rates. On a $600,000 loan, that's $200-300 less per month initially—real money in a market where every dollar counts.
Conventional fixed loans make sense if you're staying 10+ years or rates are historically low. ARMs win when you need maximum buying power now and rates are elevated. Rates vary by borrower profile and market conditions.
San Fernando sits in a transition zone where buyers often upgrade to nearby neighborhoods within 5-7 years. That ownership pattern makes ARMs particularly effective here.
Property taxes in LA County run 1.1-1.2% of assessed value. Factor that into your payment calculations when the rate adjusts—lenders will when qualifying you.
Your rate changes based on a published index plus your margin. Most ARMs adjust annually after the initial fixed period, with caps limiting how much the rate can increase.
Yes, most borrowers refinance during the fixed period if rates drop or their situation changes. No prepayment penalties apply to most ARM products.
ARMs typically start 0.50-0.75% below comparable fixed rates. The exact spread varies with market conditions and your credit profile.
Minimum is 620, but you need 680+ to access the rate advantages that make ARMs worthwhile. Higher scores unlock lower margins too.
They carry rate risk after adjustment. But with proper caps and realistic payment planning, ARMs work well for borrowers who won't keep the loan past the fixed period.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.