Question 1

What does the rate adjust to after the fixed period?

Accepted Answer

Your rate adjusts based on an index (usually SOFR) plus a lender margin. Your cap structure limits how much it can move.

Question 2

Are ARMs risky in Carpinteria's market?

Accepted Answer

Risk depends on your hold period and exit plan. A 7/1 ARM is low-risk if you sell or refi within 7 years.

Question 3

Can I use an ARM for a jumbo loan in Santa Barbara County?

Accepted Answer

Yes. Jumbo ARMs are common at Carpinteria price points. Portfolio lenders often offer the best terms.

Question 4

What credit score do I need for an ARM?

Accepted Answer

620 is the floor. For the best ARM pricing on a high-balance loan, you want 700 or higher.

Question 5

How much can my rate increase after the fixed period?

Accepted Answer

Caps vary by loan. A 2/2/5 structure caps first adjustment at 2%, annual moves at 2%, and lifetime at 5%.

Question 6

Should I choose a 5/1 or 7/1 ARM in Carpinteria?

Accepted Answer

If you plan to move or refi within 5 years, take the 5/1. Longer timeline? The 7/1 buys you more stability.

ARM Loans in Carpinteria: Lower Rates, Calculated Risk