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Adjustable Rate Mortgages (ARMs) in Exeter
ARMs make sense in Exeter if you plan to move or refinance within 5-7 years. Agricultural economy shifts mean property turnover happens more than you'd think.
Initial rate savings of 0.75-1.5% below fixed mortgages add up fast. On a $400K loan, that's $250-400 less per month during the fixed period.
Exeter's smaller inventory means you need every edge. ARMs free up cash for closing costs or reserves when competing with cash buyers.
You need 620 minimum credit for most ARM programs, 700+ for best rates. Lenders scrutinize income stability harder than with fixed loans.
DTI caps at 43% on qualifying rate, not start rate. They test affordability at fully-indexed rate plus 2% margin.
Income verification matters more here. Agricultural or seasonal earnings need 2-year averages and written stability letters from employers.
Not every lender wants Exeter ARMs. Portfolio lenders beat big banks here because they understand Central Valley agriculture cycles.
Credit unions offer 5/1 and 7/1 ARMs with lifetime caps. Regional banks sometimes match rates but add prepayment penalties after year three.
We compare 40+ ARM structures across wholesale channels. Rate, caps, margins, and adjustment frequency all vary wildly between lenders.
Most Exeter buyers overpay by choosing 5/1 ARMs when 7/1 costs just 0.125% more. That extra two years of fixed payments matters during market uncertainty.
Always check the margin and index. A 2.25% margin on SOFR beats a 2.75% margin even if start rates look identical.
Cap structure trumps start rate. A 2/2/5 cap protects you better than 5/2/5, especially in rising rate environments. Do the math at max adjustment.
Combine ARMs with 15-20% down to avoid PMI. That monthly savings stacks with your lower start rate for real cash flow improvement.
Conventional fixed mortgages cost more upfront but eliminate rate risk. Choose fixed if you're staying 10+ years or can't handle payment swings.
Jumbo ARMs work for Exeter's higher-end citrus ranch properties. Same concept, different underwriting, better rates than jumbo fixed options.
Portfolio ARMs from local lenders offer custom terms. They'll work with agricultural income that national lenders reject outright.
Exeter's ag economy means income can spike during harvest then dip off-season. Lenders want 25% reserves to cover potential payment increases.
Smaller town limits refinance options later. If rates spike, you need equity and income to escape an ARM. Build both from day one.
Property values here move with citrus markets and water availability. ARMs amplify risk if both rates and home values shift against you.
Many Exeter properties are older homes needing work. Factor repair costs into whether you can handle ARM adjustments after year five.
7/1 ARMs work best here. They cover typical ownership periods and cost barely more than 5/1 products. Rates vary by borrower profile and market conditions.
Yes, with 2-year job history and income averaging. We use portfolio lenders who understand Tulare County ag cycles. Expect higher reserve requirements.
Currently 0.75-1.5% below comparable fixed mortgages during initial period. Actual savings depend on credit, down payment, and lender. Rates vary by borrower profile.
Rate changes based on index plus margin, subject to caps. First adjustment limited to 2% on most programs. We calculate worst-case scenarios before you commit.
Not if you're strategic. ARMs work when you plan to move, can handle adjustments, or expect income growth. Wrong choice if you need payment certainty.
Yes, several regional lenders offer custom ARM terms for qualified borrowers. They're more flexible with agricultural income and local property types.
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.