The Mortgage Rates for a 5 Year adjustable rate mortgage (ARM) sank to 4% (and lower in some cases)* for Santa Clara county homes. The rate improvements yesterday has opened up terrific opportunities for home owners and First Time Home Buyers. This is is best suited if:
- You are a First-Time Home buyer and would like to move up in next 5-6 years.
- You already own a home but plan to move out by 2016.
- You plan to pay off or substantially pay down your mortgage in the next 5 years.

Assumption for the chart: 30 Year Fixed rate at 5.25% and the 5 Year ARM at 4%.
On a 5 Year ARM loan, the rate remains fixed for first 5 years and may adjust after that to a higher rate. In the chart above you could save more than $16,000 in next 5 years on a $417,000 balance even after accounting for a small closing cost to refinance. On a $700,000 balance that number is a whopping $28,000. For all other loan balances, savings could be substantial. There are no cost refinances available as well.
30 Year Fixed rate is still a great option if you want a stable rate mortgage for a longer term. The 30 year fixed rate continues to at a historically lowest levels in low 5s.
Call me at 408.905.6261 or email me at shashank@arcuslending.com if you would like a free evaluation of your Santa Clara county home mortgage to see if an ARM loan is right for you. Since I am a mortgage broker approved with more than 100 lenders, I can shop for the best rates for you.
* The rates are subjected to change any time without notice. Credit, Income, Equity and other eligibility required to qualify.
Related Post - Rates set to go up after March 2010



