Question 1

How long is the fixed period on an ARM?

Accepted Answer

Common options are 5, 7, or 10 years fixed before the rate adjusts. Pick the term closest to your expected timeline in the home.

Question 2

What happens when my ARM adjusts?

Accepted Answer

Your rate moves based on a market index plus a margin. Caps limit how much it can move at each adjustment and over the loan's life.

Question 3

Are ARM loans harder to qualify for in Aliso Viejo?

Accepted Answer

Not harder, but lenders qualify you at a stressed rate above your start rate. Your income still needs to support that higher payment scenario.

Question 4

Can I refinance before my ARM adjusts?

Accepted Answer

Yes, and many borrowers plan on it. Just watch prepayment penalty terms and make sure you have equity and credit to refinance when the time comes.

Question 5

Do ARMs work for jumbo loans in Orange County?

Accepted Answer

They work very well. Jumbo ARMs are common here because the loan sizes make even small rate differences worth thousands annually.

Question 6

What is a 2/2/5 cap structure?

Accepted Answer

It means the rate can rise 2% at first adjustment, 2% each year after, and no more than 5% over the loan's lifetime. Always confirm your caps before closing.

ARM Loans in Aliso Viejo: Lower Rates, Smarter Borrowing