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Adjustable Rate Mortgages (ARMs) in Benicia
Benicia buyers often use ARMs as a bridge strategy. The initial rate discount lets you buy more house now, then refinance when rates drop.
ARMs make sense for buyers planning to move in 5-7 years. Benicia's stable waterfront market means selling before the first adjustment is a proven play.
You need stronger qualifying ratios than fixed-rate loans. Lenders calculate payments at the fully indexed rate, not just the initial teaser rate.
Expect 620 minimum credit for conventional ARMs. Jumbo ARMs start at 680 with 20% down, though some portfolio lenders go lower with compensating factors.
About 40 of our 200+ lenders offer competitive ARM products. The spread between lenders is huge—sometimes 0.75% on the margin alone.
Credit unions often beat banks on margins and caps. We see 5/6 ARMs priced a full point below comparable 30-year fixed right now.
Most Benicia buyers gravitate toward 7/6 ARMs. Seven years of stability covers the average ownership period, and the initial savings fund reserves or improvements.
Read the margin and caps, not just the start rate. A 5/6 ARM at 5.5% with a 4% margin beats a 5.0% ARM with a 5% margin after adjustment.
ARMs versus 30-year fixed comes down to your timeline. Selling or refinancing within seven years? The ARM saves you real money every month.
Conventional ARMs offer better pricing than jumbo ARMs on loans under $766,550. Above that threshold, portfolio ARMs from specialized lenders often beat agency products.
Benicia's waterfront and historic downtown properties hold value through market shifts. That stability reduces ARM risk since you can sell without timing pressure.
Solano County sees military and commuter buyers who relocate frequently. ARMs align perfectly with 3-5 year PCS cycles or job changes to the Bay Area.
Your rate changes based on the index plus your margin, subject to caps. Most borrowers refinance or sell before the first adjustment.
Yes, and most Benicia borrowers do exactly that. We typically refinance ARMs in years 4-6 when market conditions improve.
Conventional ARMs start at 620 credit. Jumbo ARMs need 680 minimum, though portfolio lenders consider strong compensating factors.
Much safer. If you're selling within 5-7 years, you avoid adjustment risk entirely while capturing lower initial rates.
Typically 0.50-1.25% below comparable fixed rates. On a $600k loan, that's $200-400 monthly savings during the fixed period.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.