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5-Year ARM Rates with FHA
Many first time home buyers choose the 5/1 ARM because it maximizes payment power with the lowest possible monthly payment. With the FHA 5/1 ARM, borrowers get the comfort of knowing they have a loan with a mortgage rate that is fixed for five years. After the 5-year period, this loan becomes an adjustable rate mortgage and potentially the interest rate can rise. Many loan professionals refer to the 5/1 ARM as a hybrid loan because it is both a fixed and adjustable rate mortgage. Of course there is more risk with a loan that carries a variable rate, so this loan is not for everyone.
Recent changes to FHA guidelines have altered the requirements for these mortgages, including an increase in upfront insurance, using a combination of credit scores and down payments for new borrower programs, and reducing allowable seller concessions from 6% to 3%.
Our Mortgage lenders offer a variety of terms with affordable FHA rates.