Question 1

How does an ARM rate adjustment work?

Accepted Answer

After your fixed period ends, the rate adjusts annually based on a market index plus a lender margin. Caps limit how much it can move each year.

Question 2

What ARM terms are available in Monterey County?

Accepted Answer

5/1, 7/1, and 10/1 ARMs are common. The first number is your fixed period in years, the second is how often it adjusts after that.

Question 3

Can I refinance before my ARM adjusts?

Accepted Answer

Yes. Many borrowers use ARMs intentionally, planning to refinance before the fixed period ends. There's no guarantee rates will be favorable at that time.

Question 4

What credit score do I need for a King City ARM?

Accepted Answer

Most lenders require a 620 minimum. Scores above 700 typically get tighter margins and better initial rates. Rates vary by borrower profile and market conditions.

Question 5

Are ARMs riskier than fixed-rate loans?

Accepted Answer

They carry more uncertainty after the fixed period. If rates rise sharply, your payment goes up. Caps limit the worst-case scenario.

ARM Loans in King City, CA — Lower Rates, Smarter Timing