Question 1

What does a 5/1 ARM mean?

Accepted Answer

Your rate is fixed for 5 years, then adjusts every year after that. The initial rate is typically lower than a 30-year fixed.

Question 2

How high can my rate go on an ARM?

Accepted Answer

Rate caps control the max increase. A 2/2/5 cap limits the first adjustment to 2%, each later adjustment to 2%, and lifetime increase to 5%.

Question 3

Is an ARM a good fit for Dixon buyers?

Accepted Answer

It depends on your timeline. Dixon's commuter profile means many buyers move within 5-7 years — exactly when an ARM's savings are largest.

Question 4

Can I refinance before my ARM adjusts?

Accepted Answer

Yes, but refinancing depends on rates and your credit at that time. Never assume you can refinance — model the adjusted payment as your backup plan.

Question 5

Do ARMs require a larger down payment?

Accepted Answer

Not necessarily. Some ARM products allow as little as 5% down on conventional loans. Your rate and terms improve with a larger down payment.

Question 6

What index do most ARMs use?

Accepted Answer

Most conventional ARMs today use SOFR as the benchmark index. Your rate equals that index plus a fixed margin set by the lender at closing.

ARM Loans in Dixon, CA — Lower Rates, Smarter Entry Points