Question 1

How long is the fixed period on an ARM?

Accepted Answer

Common structures are 5/1, 7/1, and 10/1. The first number is your fixed-rate years before adjustments begin.

Question 2

What index do most ARMs use?

Accepted Answer

Most conventional ARMs now use SOFR as their benchmark index. Your margin is added to the index to set your adjusted rate.

Question 3

Can I refinance before my ARM adjusts?

Accepted Answer

Yes. Many borrowers refinance before the fixed period ends. No guarantee on rates or approval at that future time.

Question 4

Are ARMs risky in Morgan Hill's market?

Accepted Answer

Risk depends on your timeline and how long you hold the loan. Short-term owners often benefit. Long-term holders face more rate exposure.

Question 5

Do ARMs work for jumbo loans in Santa Clara County?

Accepted Answer

Yes — jumbo ARMs are common here. The rate savings versus a jumbo fixed can be significant on large loan balances.

ARM Loans in Morgan Hill: Lower Rates, Smart Strategy