Question 1

What happens when my portfolio ARM adjusts?

Accepted Answer

Your rate moves based on an index plus a margin, capped by annual and lifetime limits. Most adjust once per year after the fixed period ends.

Question 2

Can I refinance a portfolio ARM into conventional?

Accepted Answer

Yes, if your credit and income now meet agency standards. Many borrowers use portfolio ARMs as a bridge to conventional refinancing.

Question 3

Do portfolio ARMs work for primary homes in Gilroy?

Accepted Answer

They can, but you usually pay better rates on investment properties where DSCR drives approval. Primary homes favor agency loans when you qualify.

Question 4

How much higher are portfolio ARM rates?

Accepted Answer

Expect 0.75-1.5% above conventional ARM rates. Exact pricing depends on credit, down payment, reserves, and property type.

Question 5

What if I can't qualify when the ARM adjusts?

Accepted Answer

You don't re-qualify at adjustment. The loan continues with new rate terms. Plan ahead to refinance before your rate increases significantly.

Portfolio ARM Loans in Gilroy: Flexible Financing Beyond Agency Guidelines