2/1 Adjustable Rate Mortgage (ARM)

Why would I want a 2/1 ARM home mortgage loan

The 2/1 ARM is a fairly new option. You will be interested in a 2/1 ARM if you want a low, fixed rate mortgage for the first two yeas of your term, then an interest rate that fluctuates annually with the market for the rest of your loan term. This is a good option if you are not planning to stay in your house for long.

What can I use a 2/1 ARM home mortgage loan for and what are my options

You can use a 2/1 ARM to buy a house that you may not be able to afford for another two years. Your first two years of a 2/1 ARM are fixed at a low rate, so if you are still putting the last kid through college, making payments on a car, trying to get rid of other debts, or are certain about a substantial and near future pay raise, you may want to consider a 2/1 ARM. However, if you feel you need a little longer term to pay fixed low rates, you may want to consider a 5/1, 7/1 or even a 10/1 ARM.

Why should I get a 2/1 ARM home mortgage loan

A 2/1 ARM will allow you to take advantage of two years of guaranteed low payments.

How can I get a 2/1 ARM home mortgage loan

We offer 2/1 ARM to the right candidates. Click here to apply.

How can my FICO/Credit Score affect my mortgage rate

Banks typically want to see one to two years of good credit before approving a 2/1 ARM. If you score between 720 and 850, you are A-Paper which means you have great credit and are an excellent candidate for this loan. If you score below 660, you will have a hard time getting a lender to give you this loan. If you score below 620, you are Sub-Prime, or Non-Prime lending material.

Q: How much of a down payment do most lenders expect for a 2/1 ARM home mortgage loan?
A
: Many lenders expect 5%-10% down for this kind of mortgage.

Q: Do 2/1 ARM home mortgage loan have caps?

A: Yes, most all ARMs have caps that are usually around two points for a year, and six points for a lifetime.

Q: What Indexes can I use for my 2/1 ARM home mortgage loan?

A: It differs between lenders, but most all lenders offer the traditional COFI, COSI, and LIBOR.

This site is not a broker and does not collect or solicit mortgage applications. Content is for informational or comparison purposes only. Services are not available in New York. Products and services may not be available in all other states.

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