Loading
Adjustable Rate Mortgages (ARMs) in San Marcos
San Marcos buyers use ARMs to max out buying power in North County's competitive market. The initial rate discount versus fixed loans can mean qualifying for $50K-$100K more home.
Most San Marcos ARM buyers plan to sell or refinance within 7 years. That matches well with 5/1 and 7/1 ARM structures common in this market.
Credit requirements mirror conventional loans: 620 minimum, but 700+ gets you the best rates. Lenders want to see you can handle payments at the fully-indexed rate, not just the start rate.
Debt-to-income caps at 43% for most lenders, though some portfolio products go to 50%. Down payment starts at 5% for conforming ARMs, 10-20% for jumbo ARMs.
Only about 40% of lenders actively price ARMs competitively right now. Shopping 5-7 lenders is essential because rate spreads can hit 0.5% or more on identical scenarios.
Credit unions around San Marcos often have portfolio ARM products with more flexible adjustment caps. Banks tend to offer standard 5/1 and 7/1 agency ARMs with tighter pricing.
I steer most San Marcos buyers toward 7/1 ARMs over 5/1s. The rate difference is usually 0.125%, but you get two extra years of fixed payments. Worth it for the stability.
Watch the caps closely. A 2/2/5 cap structure (2% first adjustment, 2% subsequent, 5% lifetime) protects you better than 5/2/5 products some lenders push.
ARMs beat fixed rates by 0.5-1.0% at origination. On a $750K San Marcos home, that's $250-$500 monthly savings during the fixed period. Rates vary by borrower profile and market conditions.
Jumbo ARMs make more sense than jumbo fixed if you're buying above conforming limits. The rate discount amplifies on larger loan amounts, sometimes hitting 1.25% versus 30-year fixed.
San Marcos sits between established neighborhoods and new construction. Buyers often use ARMs to get into newer builds, then sell when equity builds in 5-7 years.
North County job mobility runs high with biotech and tech workers. ARMs fit borrowers who expect relocation or income changes that would trigger a refi anyway.
Your rate adjusts based on an index (usually SOFR) plus a margin set at closing. Caps limit how much it can increase per adjustment and over the loan life.
Yes, most San Marcos ARM borrowers refinance during the fixed period. You need sufficient equity and qualifying income for the new loan.
ARMs work best if you plan to sell or refinance within 7 years. They're risky if you need long-term payment certainty.
Typically 0.125-0.25% higher for the 7/1. The extra stability usually justifies the small rate bump for San Marcos buyers.
No. Conforming ARMs start at 5% down, same as conventional fixed loans. Jumbo ARMs typically need 10-20% down.
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.