Question 1

How long does the fixed period last on an ARM?

Accepted Answer

Common options are 5, 7, or 10 years. After that, the rate adjusts annually based on a market index.

Question 2

What happens when my ARM adjusts?

Accepted Answer

Your rate changes based on an index plus a margin. Caps limit how much it can move at each adjustment.

Question 3

Do ARMs make sense for Los Altos Hills prices?

Accepted Answer

Yes. The savings on a $3M+ loan during the fixed period are substantial. Most buyers refinance before adjustment anyway.

Question 4

What credit score do I need for a jumbo ARM?

Accepted Answer

Most jumbo ARM lenders want 720 or higher. Some programs allow 700 with strong reserves.

Question 5

Can I refinance out of an ARM before it adjusts?

Accepted Answer

Yes, and many borrowers do. Watch for prepayment penalty clauses — most jumbo ARMs don't have them, but confirm.

Question 6

What reserves do lenders require on jumbo ARMs here?

Accepted Answer

Expect 12 months of PITI reserves as a baseline. Some lenders require more at higher loan amounts.

ARM Loans in Los Altos Hills: Lower Rates, Smarter Strategy