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Conventional 5 Year ARM

Loan Term: 30 / 25 / 20 / 15 / 10 years
Max Loan Amount: $417,000

Equity Required:
10% of appraised value
Available for: Owner-occupied primary residence, second home, investment property, 1-4 unit properties


Loan Features:

Fluctuating interest rate and monthly payment
After the initial 5 year fixed rate period, your monthly principal and interest payment will fluctuate with annual adjustments.

Lower initial interest rate
Generally, adjustable rate loans have a lower interest rate than most fixed rate loans. This low interest rate can help you qualify for a larger loan amount, or you can save money with lower interest payments.

Various rate lock options
We offer a variety of rate lock options to help you achieve the rate you desire. Your personal loan officer can help you choose your most effective rate lock option after you apply for your mortgage.

Consider choosing this loan if:


You want a low interest rate and don't mind fluctuating payments.


You want to save money in the first five years of your loan by taking advantage of the low initial interest rate that an ARM loan provides.


You plan to move or payoff your mortgage within 5 years.


You are purchasing your new home when market interest rates are fairly high and you expect them to come down in the future.

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Other
Conventional Adjustable Rate Option:
Conventional 1 Year ARM
Conventional 3 Year ARM
Conventional 5 Year ARM
Conventional 7 Year ARM

(click on the loan to learn more about it)
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Learn more (key terms and concepts)


Conventional Conforming Loans
Conventional Conforming Loans are loans that conform to national guidelines established by the Federal National Mortgage Association (FNMA or Fannie Mae) or the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac). These guidelines insure the security of your mortgage and therefore the security of your home.

Maximum Loan Amounts
Loan Amounts for conventional loans can vary in size, but can not go over $475,000 for a single-family home. The rest of the loan limits are as follows:


Jumbo Loans
 Jumbo Loans are conventional loans that are larger than conforming loan limits (any loan over $275,000 for a single-family home).
Adjustable Rate Loans
 Adjustable Rate conventional loans are mortgages with an interest rate that adjusts periodically. Usually, the rate will adjust once a year but the time between adjustments can range from once a month to once a year. These adjustments will affect the amount of your monthly payment if rates increase or decrease over time. Some ARM loan have a fixed rate for a given term, usually 3, 5, 7, or 10 years, then the rate adjusts periodically for the remaining life of the loan. In general, you might choose to select an adjustable rate loan if you thought interest rates were going down in the future, or if mortgage rates are high and you expect to refinance in a few years. Some other advantages of most ARM loans are lower initial rates and flexible qualifying.



Term Options
 The Loan Term is the number of years it will take to pay the loan back in full. Most commonly, mortgage terms range from 10 to 30 years. For our purposes, we will compare a 15 and a 30 year loan:

30 year loan
15 year loan
Extends principal payments
over 30 yrs.
(lowest payment available)

pay more total interest
when you pay over 30 years


 Extends principal payments
over 15 yrs.
(higher monthly payment)

Pay less total interest
by paying over 15 years

Build equity faster

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All rights reserved. Revised: October 16, 2000.