5/1 Year LIBOR Home Mortgage Loan

Why would I want a 5/1 Year LIBOR

A 5/1 Year LIBOR is a good option for you if you want low and predictable monthly payments for the first five years of your mortgage. 5/1 LIBOR is an adjustable rate mortgage (ARM) that is indexed by LIBOR (London InterBank Offering Rate). For the first five years you will only pay interest and it will be at a fixed rate. After the initial term, your payments will change annually, and according to LIBOR rates.

What can I use a 5/1 Year LIBOR for, and what are my options

You can use a 5/1 Year LIBOR for any kind of home purchase. It may be a good option if you plan on selling or refinancing after five years. Some alternatives to 5/1 Year LIBOR are 3/1 Year LIBOR, 1Year LIBOR, 6 Month LIBOR, and 1 Month LIBOR.

Why should I get a 5/1 Year LIBOR

A 5/1 Year LIBOR will help you qualify for a larger loan, and therefore you will be able to purchase a more expensive house. Keep in mind that your rates will go up after the first five years, and it is important that you are financially ready to handle them to prevent foreclosure.

How can I get a 5/1 Year LIBOR

We offer the 5/1 Year LIBOR. Click here to fill out an application.

How can my FICO/Credit Score affect my mortgage rate

Your Credit Score is one of the most important things your lender will consider when determining your mortgage rate. If you score between 720 and 850, congratulations! You are A-Paper and should have no trouble securing the loan you need. If you score below 660, you will have trouble finding a lender, even though the official cutoff for Sub-Prime or Non-Prime lending is 620

Q: Does the 5/1 Year LIBOR have caps?

A: Almost all 5/1 Year LIBORS have caps. You can expect a 2% annual cap and a 6% lifetime cap if you have a 5/1 Year LIBOR.

Q: Does the 5/1 Year LIBOR require a down payment?

A: The 5/1 Year LIBOR does require a down payment. The amount will depend on your lender.

Q: Does the 5/1 Year LIBOR have a pre-payment penalty?

A: This also will depend on you lender, but there usually is not a pre-payment penalty.

Q: Where can I find current LIBOR rates?

A: You can see the previous day’s rates in the Wall Street Journal.

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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