What are 5-1 ARM Jumbo Loans?
5-1 ARM jumbo loans are loans with a fixed rate for the first five years. After the first five years, the interest rate becomes adjustable. Jumbo mortgage loans are given to borrowers that are highly qualified. Jumbo loans exceed mortgage limits set by the federal government for borrowers. Traditional conforming loan limits do not apply for jumbo loans. There are many different types of jumbo loans for your mortgage.
The limit for loans are set by the area you live in. For example, the limit can be anywhere from $484,350 to $726,525 depending on the area you reside in. An ARM loan is very beneficial for homeowners in this circumstance. Fixed rates are great for borrowers and allow them lower interest rates. 5-1 ARM jumbo loans are a smart and strategic decision for homeowners that plan to move within the first five years.
The Benefits of 5-1 ARM Jumbo Refinance
- Low Interest Rates
Homeowners typically refinance for a better rate and term. Refining your mortgage with a 5-1 ARM jumbo is the best way to save money, especially for the first five years. If a homeowner plans to move in five years, they will save when deciding on a 5-1.
Another common reason homeowners refinance is due to an improvement in their credit score. If your credit score is high, you may be eligible for lower interest rates and qualified to borrow larger amounts. This is a major benefit when refinancing.
- Beneficial for Highly Qualified Borrowers
Highly qualified borrowers are individuals who qualify for larger lended amounts than perviously set by the federal government for their area. For homeowners that qualify, 5-1 ARM jumbo loans are a great way to save. Traditional loans are not as beneficial for qualified homeowners as jumbo loans. This is why 5-1 ARM jumbo loans are a strategic option for homeowners looking to refinance.