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Adjustable Rate Mortgages (ARMs) in Loomis
Loomis buyers often use ARMs when they plan to move within 7-10 years or expect income growth. The initial rate discount versus fixed mortgages can be 0.5-1% lower.
Placer County's stable appreciation makes ARMs less risky here than in volatile markets. Most Loomis homeowners refinance or sell before the first adjustment hits.
Lenders qualify you at the fully-indexed rate, not the teaser rate. Expect to prove you can afford payments if rates hit lifetime caps.
Most ARMs require 620+ credit for conforming loans, 680+ for jumbos. DTI limits match fixed-rate loans at 43-50% depending on compensating factors.
Not every lender prices ARMs competitively. We see rate spreads of 0.375% between our best and worst wholesale sources on identical terms.
Portfolio lenders sometimes offer custom ARM structures with longer fixed periods or gentler caps. Worth exploring if you're buying a $1M+ Loomis property.
ARMs make sense in Loomis if you're relocating in 5-7 years or plan to pay down principal aggressively. They're a mistake if you need payment certainty.
Read the adjustment caps carefully. A 2/2/5 cap structure means 2% max increase at first adjustment, 2% per period after, 5% lifetime. That matters when rates climb.
A 7/1 ARM at 6.5% versus a 30-year fixed at 7.25% saves $250/month on a $600K loan. Over seven years that's $21K before the rate adjusts.
If you're confident you'll sell or refinance before adjustment, the ARM wins. If there's any chance you stay longer, fixed rates eliminate the risk.
Loomis home values run higher than average Placer County prices, so jumbo ARMs are common here. Those typically need 20% down and 700+ credit.
Many Loomis buyers are upgrading from starter homes or relocating for work. Both scenarios favor ARMs since move timelines are usually clear.
Your rate moves up or down based on the index plus margin, subject to caps. Most Loomis borrowers refinance or sell before the first adjustment.
Yes, anytime rates make sense or before your adjustment date. We typically see this 4-6 years into a 7/1 ARM.
No, down payment requirements match fixed loans. Conforming ARMs allow 3-5% down, jumbos need 10-20% depending on credit.
7/1 ARMs dominate because they match typical ownership timelines. 10/1 structures work for buyers who want longer rate certainty.
Lenders compete on ARM pricing like any loan. Shopping multiple wholesale sources often finds 0.25-0.5% better rates.
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.