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
We are not the FHA, VA, USDA, HUD or any other government organization. The content on this blog is intended for information purposes only. 
