Question 1

What does the '7/1' in a 7/1 ARM mean?

Accepted Answer

Seven years at a fixed rate, then it adjusts once per year. Most Palo Alto buyers sell or refinance before year seven.

Question 2

How much can my rate increase after the fixed period?

Accepted Answer

Rate caps control this. A common structure is 2% at first adjustment, 2% per year after, 5% lifetime max.

Question 3

Do jumbo ARMs have stricter requirements?

Accepted Answer

Yes. Expect 720+ credit, larger reserves, and full income documentation. Lenders price jumbo ARMs tighter than conforming.

Question 4

Can I refinance out of an ARM before it adjusts?

Accepted Answer

Yes, and many Palo Alto buyers plan for this. Approval depends on rates and your financial profile at that time.

Question 5

Are ARMs risky on a $2M+ purchase?

Accepted Answer

The payment swing at adjustment is real on large balances. Know your cap structure and have a clear exit plan.

Question 6

Does SRK CAPITAL offer portfolio ARM programs?

Accepted Answer

Yes. We access portfolio ARM lenders who hold loans in-house — useful for complex income or large loan scenarios.

ARM Loans in Palo Alto: Lower Rates, Smarter Strategy