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Adjustable Rate Mortgages (ARMs) in Hollister
Hollister buyers who don't plan to stay put for 30 years often waste money on fixed-rate premiums. ARMs start 0.5-1.5% lower than fixed rates, which matters when you're stretching to buy in San Benito County.
Most borrowers here sell or refinance within seven years anyway. A 7/1 ARM gives you stability through that window while cutting your monthly payment by $200-400 on a typical purchase.
You need the same credit and income as conventional loans—typically 620+ credit and debt under 43% of gross income. ARMs don't magically approve borrowers who can't qualify for fixed rates.
Lenders actually qualify you at a higher stress rate, not your initial rate. They want proof you can handle payments if rates adjust up. That often means you need stronger financials than fixed-rate borrowers.
Not every lender prices ARMs competitively. Some wholesale lenders beat retail banks by 0.25-0.375% on the same ARM product. That's the advantage of a broker shopping 200+ lenders instead of one bank's rate sheet.
The fixed period matters more than the index. A 7/1 ARM from one lender can beat another's 5/1 ARM even with a higher margin. We compare actual payments across lenders, not just advertised rates.
Hollister buyers making short-term plays—fixing up a property, relocating for work in 3-5 years, or planning to trade up—should default to ARMs unless rates invert. I've seen borrowers save $15,000+ over five years compared to fixed rates.
The adjustment caps matter more than initial rates. We look for 2/2/5 structures: max 2% adjustment at first change, 2% per adjustment after, 5% lifetime cap. Some lenders bury bad caps in fine print.
Fixed rates make sense if you're parking in Hollister for 10+ years or can't stomach payment uncertainty. ARMs win when you have a shorter horizon or expect income growth that offsets future adjustments.
Jumbo ARMs work well for higher-balance San Benito County purchases where the rate difference compounds. A 1% lower start rate on a $900,000 loan saves $750 monthly—real money even if rates adjust later.
San Benito County sees fewer ARM options than Bay Area markets, but that's changing as more buyers treat Hollister as a commuter compromise. Lenders who wouldn't touch ARMs here five years ago now compete aggressively.
If you're buying in Hollister to build equity before moving closer to San Jose or the Peninsula, an ARM matches that strategy. Don't pay for 30 years of rate protection you won't use.
Your rate moves up or down based on an index plus a fixed margin, capped at 2% per adjustment. You get 60 days notice before any payment change.
Yes, most borrowers refinance during the fixed period if rates drop or before the first adjustment. No prepayment penalty on most ARMs we offer.
No, down payment rules match fixed-rate loans. You can get ARMs with as little as 3-5% down on conventional products.
Only if you'll stay past year seven and the rate premium is under 0.25%. Most borrowers overpay for longer fixed periods they don't need.
Most use SOFR now instead of old LIBOR rates. The index doesn't matter much—focus on margin and caps instead.
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.