Question 1

What does the 5/1 in a 5/1 ARM mean?

Accepted Answer

Your rate is fixed for 5 years, then adjusts once per year. Match the fixed period to how long you plan to own.

Question 2

How much can my rate increase after the fixed period?

Accepted Answer

That depends on your cap structure. A 2/2/5 cap limits the first jump to 2%, then 2% annually, with a 5% lifetime ceiling.

Question 3

Are ARMs risky for Petaluma buyers?

Accepted Answer

Risk depends on your plan. Buyers with a clear sell or refi timeline before adjustment take on very little rate risk.

Question 4

What index do most ARMs use?

Accepted Answer

Most conventional ARMs today use SOFR as the index. Your rate equals the index plus the lender's margin.

Question 5

Can I refinance out of an ARM before it adjusts?

Accepted Answer

Yes — and many Petaluma buyers plan exactly that. Just account for closing costs when running your numbers.

Question 6

Do ARMs work for jumbo loans in Sonoma County?

Accepted Answer

They're common here. Jumbo ARMs often carry lower start rates than jumbo fixed loans, which matters on large balances.

ARM Loans in Petaluma, CA — Lower Rates, Smarter Entry