California Jumbo Loan

Benefits of an ARM - An ARM allows you to receive more money at a lower interest rate than a fixed rate loan. If you are planning to move within a few years, you can save money and avoid rising payments.

If you would like to lower your monthly mortgage payment to be able to apply more money in other places of your life an ARM loan may be right for you. An ARM loan should provide you a much better interest rate than a fixed rate loan, therefore giving you a lower payment each month. This in turn will free up some money each month in order for you to use the money where it is needed more at this time.

If you only plan on being in your home for a short period of time, then an ARM can be advantageous to you. If you know you will only be in the home for 3-5 years, then you would be better off taking a 5 year ARM. The lower interest rate that it offers, will save you hundreds of dollars while in the home.

When considering an ARM loan you should take into consideration your lifestyle and future goals. ARM loans can benefit you with the reduced interest payments because of a lower interest rate which will allow you to invest more money into principal reduction and other valuable investments.

Hybrid ARMs - Hybrid ARMs have fixed and adjustable features that usually start out as fixed for a set period of time.

5/1 ARMs carry a fixed rate for the first five years before becoming ARMs.

3/1 ARMs carry a rate that is fixed for the first three years of the loan, after which point they become ARMs.

It is important to understand the difference between Adjustable Rate Mortgages and Fixed payment mortgages. In and ARM, the interest rate will be fixed during the initial period so you will always be paying at least the interest each month. Fixed payment mortgages will have a fixed payment for the initial period, but the interest will fluctuate and you may not be paying the interest due on your loan each month.

Many people buy homes planning to only live there a few years.
In this case a hybrid ARM makes the most sense due to its low starting interest rate.

Hybrid ARMs are beneficial to investors who are obtaining a mortgage on a property they intend to resell within a short period of time.
The decreased starting interest rate frees monthly cash flow that can be used for rennovation, landscaping, etc.