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How to Refinance a Home Equity Line of Credit

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

If you have a home equity line of credit, or HELOC, you may at some point wonder whether you can refinance the loan. That’s particularly true when you enter a new phase of the loan that requires larger minimum payments than you were making before. Higher interest rates can also increase the size of your payments and prompt you to consider refinancing.

What is a HELOC?

When you take out a HELOC, you establish an account that allows you to borrow against your home equity. A HELOC is different from a home equity loan in that a HELOC is a line of credit that you use similar to a credit card, whereas with a home equity loan, you get a lump sum of money that you pay back in installments.

HELOCs are usually used for large expenses. The top reasons borrowers take out a HELOC, according to a 2017 survey by TD Bank, are to pay for home renovations, emergency funds and education expenses.

As with any other revolving credit account, you can use HELOC funds up to the limit established by your lender, repay your balance and borrow again, as long as you do so within the initial specified “draw period.” Typically, you can access the funds with checks or a credit card.

During your draw period, which is often 10 years, you’ll make minimum payments. With some plans, the payments are interest only; with others, they also include a small percentage of your principal. HELOCs typically have variable interest rates.

Once the draw period ends, you’ll be in repayment mode and typically won’t be able to borrow against the account unless your lender allows for a renewal of the HELOC. Some HELOC customers choose to refinance before the draw period ends so they can continue to have access to the funds. About 25% of HELOC borrowers each year are refinancing an existing HELOC to change the terms or get a better rate, according to a survey by TransUnion.

A HELOC is a second mortgage on your home, but you only pay the interest and make payments on the amount you borrow, not on the full amount of the line of credit. For example, if you have a HELOC with $50,000 available but only borrow $20,000, your payments will be based on $20,000.

When you reach the end of your draw period and your loan resets, you could see a big bump in your minimum payments, particularly if you’ve been paying only interest and not paying down your loan balance.

Reasons to refinance a HELOC

You may want to refinance your HELOC to have continued access to your equity after your first draw period ends or to see if you qualify for a larger line of credit because you believe your home has increased in value.

Other reasons to refinance include wanting to lower your minimum payments by extending the loan repayment period with a new HELOC or with a lower interest rate.

Some borrowers also use a HELOC to pay down their mortgage enough to qualify to cancel private mortgage insurance. You usually have to pay for PMI if you make a down payment of less than 20%. You can request to cancel your PMI after you’ve paid down enough of your principal that you owe less than 80% of the home’s original value.

Options for refinancing your HELOC

There are a couple ways to refinance your home equity line of credit.

Get a new HELOC to pay off the old HELOC

You can apply for a new HELOC to repay the balance on your existing HELOC with the same lender or a different lender.

Pros:

  • Lowers your payments, since you’ll return to the interest-only repayment plan during the new draw period.
  • Typically has lower closing costs than home equity loans and mortgages.
  • Initiates a new draw period for access to your equity.

Cons:

  • HELOCs have variable interest rates that could increase your payments as interest rates rise.
  • Your principal balance won’t be reduced (unless you make extra payments) until you enter the repayment period.
  • You’re paying more interest overall by extending the repayment period.

Get a home equity loan to pay off the your HELOC balance

Another option for paying off your HELOC balance is to get a home equity loan. Be sure to compare home equity loan options from your current lender and other lenders if you go this route.

Pros:

  • Your monthly payments are likely to be lower than paying your current HELOC’s principal and interest.
  • You’ll lock in a fixed rate, so your payment won’t fluctuate with interest rates.
  • You may be able to extend the loan repayment period for longer than a HELOC.

Cons:

  • Your closing costs may be higher than with a HELOC.
  • You’ll pay additional interest over time compared to repaying the HELOC right away.

Refinancing your mortgage and HELOC into one new loan

If you decide to refinance into one loan, you’ll need to compare the interest rates and payments you’re making on each loan now with the rate and payments of a combined loan. The refinance would be considered a “cash-out” refinance, since some of your home equity would be taken out to pay off your HELOC.

Pros:

  • You have only one mortgage payment on which to pay principal and interest.
  • You have the option of a fixed-rate or adjustable rate mortgage.

Cons:

  • Closing costs are typically higher than for a home equity loan or HELOC.
  • A new loan could extend your repayment on your home for more time, unless you choose a shorter loan term.
  • If your cash-out refinance results in home equity of less than 20%, you may have to pay for PMI, which will increase your monthly costs.

Regardless of your refinance choice, you’ll need to prepare for your application process with documentation of your income, your assets and your debts, including your mortgage.

How does a lender decide whether to refinance your HELOC?

Refinancing a HELOC is similar to applying for any other mortgage loan. A lender may qualify you for a new loan and determine the amount you can borrow based on your financial qualifications and ability to repay the loan, and on the appraised value of your home.

The lender will typically look at these factors when deciding whether to approve you:

  • Your loan-to-value ratio. Your loan-to-value ratio, or LTV, is the amount you’re looking to borrow divided by the value of your home. According to the Federal Trade Commission, most lenders allow consumers to borrow up to a maximum of 85% of their home’s value, including the first mortgage and a HELOC.
  • Home equity. Depending on the lender, your home will need to be appraised or the lender will do an automated valuation of your property. An automated valuation uses public records to determine how much your home is worth.
  • Your debt-to-income ratio. Your debt-to-income ratio, which compares your monthly payments on recurring debt to your gross monthly income, should be no more than 43%.
  • Your creditworthiness. A credit score above 700 offers your best chance for an approval for a HELOC, according to the credit bureau Experian. You may also qualify with a score between 660 and 700. However, if you have a lower credit score, your lender may charge you a higher interest rate.

Other options if you’re not able to refinance

If you don’t have enough home equity, you have too much debt or your credit score is too low, you may need to simply keep the HELOC you have and make payments. However, if you can’t make the payments, you are in danger of facing foreclosure and losing your home.

As soon as you know you will have problems repaying your HELOC, contact your lender to discuss possible loan modifications that could make your payments more affordable. You may also want to contact a HUD-approved housing counselor to discuss options for special programs and to have a knowledgeable person advocate for you.

How do rising interest rates affect HELOC refinancing?

Interest rates have been rising and are likely to continue inching up this year. That affects HELOC rates. Unlike interest rates on a first mortgage, HELOC rates are tied to short-term rates such as the federal funds rate and the prime rate, says Tendayi Kapfidze, chief economist for LendingTree, which owns MagnifyMoney.

“In a rising rate environment, you need to be aware of the fact that your interest rate, and therefore your payments, can go up,” Kapfidze said. “You need to be prepared for a higher rate and estimate your potential payments to make sure you can afford them.”

Conclusion

Whether or not your HELOC is about to shift from your draw period to repayment mode, it’s smart to review your current HELOC terms and compare them to other available options. Planning ahead can make it easier for you to understand the pros and cons of a new HELOC, a home equity loan or refinancing your home. In addition, that extra time and research gives you an opportunity to improve your credit or your personal balance sheet so that you have a better chance of getting approved for a loan when you need it.

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Michele Lerner
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Michele Lerner is a writer at MagnifyMoney. You can email Michele here

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7 Reasons Your Mortgage Application Was Denied

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Rejection isn’t fun under any circumstances, but it can be especially frustrating when you’re trying to buy a home. If your mortgage application was denied, know that you aren’t alone. Nearly 11% of mortgage applications were denied in 2017, according to the latest available data from the Consumer Financial Protection Bureau (CFPB).

Reasons for a mortgage application denial usually fall into a handful of categories, including credit history, employment history or property issues. Regardless of what the problem is, you’ll walk away from the experience learning why you’ve been denied and can use that information to work toward a favorable outcome in the future.

Below are seven of the most common reasons your mortgage application might not be approved, according to the CFPB — and then how to move forward.

1. You have a history of late payments

Before you can be approved for a mortgage, your lender needs to make sure you’d be able to repay the loan. Your income and how well you manage your existing debt help determine whether you’ll satisfy your mortgage payments every month, but so will your payment history. Failing to pay your electric, internet or other recurring bills on time will eventually affect your credit reports and scores.

Why this matters

Your payment history makes up the largest chunk of your credit score — 35% — and is listed on every debt-related account included on your credit report. Your credit score factors in the following details about late or missed payments, according to the FICO credit scoring system:

  • How late you were
  • How much you owe
  • How recently you were late
  • How many late or missed payments you have

Other negative information such as a bankruptcy or an account in collections are also factored into your score and will catch your lender’s attention.
If you have a credit history filled with late payments, this indicates to your lender that you struggle with maintaining on-time payments and are more likely to continue making late payments while repaying a mortgage.

How to avoid this issue: Maintain a track record of on-time payments for all your existing debt before and after you apply for a mortgage. If you have a few late payments on your credit report, keep in mind the further removed you are from your late payments, the less impact they’ll have on your credit score.

2. Your job status has changed

Rapidly switching employers and being in-between jobs can be grounds for an application denial.

Why this matters

Mortgage lenders like to see evidence of steady employment, especially for the last two years. They’ll usually verify this by reviewing your pay stubs and W-2s. If your employment history is spotty and doesn’t demonstrate that you’ve been maintaining consistent employment, you’re considered a higher risk and likely won’t be approved.

How to avoid this issue: Limit your job changes before you apply for a mortgage. A good rule of thumb is have had no more than three employers in the last two years and no time between those jobs where you were unemployed. Additionally, avoid any job changes after applying for a mortgage, as this could derail the process.

3. Your bank account has some red flags

Lenders will request at least the last few months of statements from your banking institution to see how your finances are holding up. Because they’re closely reviewing those documents, any suspicious-looking activity will present some red flags. Suspicious activity might include, but isn’t limited to:

  • Using multiple P.O. boxes or frequently changing addresses.
  • Conducting wire transfers to and from places known for their tax haven status or terrorism affiliation.
  • Making large cash payments from sources that typically aren’t associated with cash-based transactions.
  • Using money orders that are sequentially numbered.

Why this matters

Combing through your financial profile is part of the mortgage lending process. If you frequently overdraft your checking account, that won’t reflect well on your reputation as a prospective borrower. On the other end of the spectrum, having large deposits that aren’t accounted for can also cause problems.

You’ll need to verify every income source you want counted as part of your application, said Bruce McClary, vice president of communications for the National Foundation for Credit Counseling in Washington, D.C. Any side hustles you have need to be documented and verified if you want that information factored into your ability to afford the mortgage. One way to verify income is by providing your lender with pay stubs or W-2s from your supplemental income sources.

“If you’re relying on every penny, that can really be a roadblock,” McClary said.

How to avoid this issue: Keep track of all your income-related documents and provide them to your lender when they’re requested.

4. You omitted information on your application

Don’t try to outsmart your mortgage lender by withholding information that is pertinent to your loan application, such as neglecting to mention alimony payments or an unpaid federal tax debt. And even if you do so unintentionally, it might be too late to correct it once it’s discovered.

Why this matters

Your loan officer should carefully review your application to make sure it’s filled out completely and accurately. A small error like missing a zero on your income or accidentally skipping a section could mean losing your dream home.

There’s also the chance you forgot to include information that the underwriter caught later in the more extensive screening process, such as money owed to the IRS.

How to avoid this issue: Disclose all of your debt, judgments and other financial-related details to your loan officer upfront. Otherwise, they may not be able to help you if it comes up and disqualifies you later on.

5. You recently opened a new credit account

One of the main ways homebuyers can self-sabotage their chances at being fully approved for a home loan is by making decisions — such as opening a new credit card or financing a new vehicle — that affect their credit profile, after getting an initial green light from their lender in the form of a mortgage preapproval.

A preapproval is conditional and based on where your credit reports, credit scores, income and overall financial picture stand at the time the preapproval was granted. Any changes you make to your finances can prevent you from buying a home.

Why this matters

When you add a new set of debt to your plate, that increases your debt-to-income (DTI) ratio. Your DTI ratio is the percentage of your gross monthly income that is used to repay debt. In most cases, mortgage lenders like to see a DTI ratio of 43% or less. Adding any type of credit account will jeopardize your DTI ratio and potentially push you into denial territory.
“Everybody focuses so much on the credit report, but the other question is: Are you financing a home that you can actually afford?” McClary said.

How to avoid this issue: Don’t make any financial decisions that will result in an inquiry on your credit reports and an increase in your debt load. Practice this for 6-12 months before you start the homebuying process, McClary advised. You’ll also need to continue this practice until after you get your house keys. Additionally, try to find ways to boost your income to pay off debt.

6. You don’t have enough cash to close

Borrowing a mortgage will cost you more than just your monthly mortgage payment. In most cases, you’ll have a required down payment and closing costs to pay for. If you don’t have proof that you can cover those costs, your application may be rejected.

Why this matters

Your mortgage lender will want you to have some skin in the game for your home purchase, which would be your down payment. There are also the closing costs you’ll be charged for taking out a mortgage.

During the approval process, your lender will request that you provide proof of funds to close on your loan. Some examples of proof include bank statements, retirement account statements and gift letters with the donor’s proof of funds — in cases when a loved one is helping you meet your “cash to close” amount. Be sure your gift money is coming from an acceptable source, however.

Failing to provide the necessary documents can lead to a mortgage denial.

How to avoid this issue: Save aggressively for your down payment and closing costs. It’s possible to qualify for a mortgage with as little as 3% down, depending on your credit score. Your closing costs can range from 2% to 5% of your home’s purchase price.

If you’re borrowing or withdrawing from a retirement account, supply documentation from your plan provider that shows you qualify to do so, along with statements that verify you have the funds available to use for your home purchase. And if you need some extra help, consider a down payment assistance program.

7. Your home appraisal doesn’t match up

Getting a full mortgage approval is also contingent upon having the home appraised. Any problems that come up during the appraisal process can stop you from getting your house keys.

Why this matters

A home appraisal is an unbiased estimate of a home’s value. Your mortgage lender will more than likely require an appraisal for the home you’re trying to buy in order to verify that the purchase price checks out. If the appraisal aligns with the sales price or is slightly higher, no worries there. But if the appraisal is lower than the sales price, your lender might deny your application.

How to avoid this issue: If you have the financial capacity to do so, you can make up the difference in cash. You could also try negotiating a lower sales price with the home seller.

How to move forward after a mortgage denial

Once you’ve been denied, it’s time to figure out how to work toward eventually getting approved. Keep these tips in mind on how to move forward.

  • Find out why you were denied. Mortgage lenders are required to give you an explanation for why they denied your mortgage application if you submit a request for that information in writing, according to the CFPB. They must also provide you with a copy of the credit report that factored into your denial.
  • Improve your circumstances. Whether it’s a high DTI ratio, too short of an employment history or another common setback, take some time to correct those issues and better position yourself for mortgage approval in the future.
  • Consider housing counseling. In cases where you were denied for credit or income-related reasons, McClary suggests reaching out to a nonprofit housing counseling agency for help addressing those issues.

Everyone’s timeline is different for when they should apply again, so be sure to check with your lender or a housing counselor for guidance on next steps.

The bottom line

Being denied for a mortgage can be a discouraging experience, but it doesn’t mean all hope is lost for your goal of homeownership.

Once you’re clear on why you were denied, you can make the necessary changes so you’re not rejected the next time around.

“The more you do leading up to the loan application to make sure that you check and double-check every step, then the easier the actual homebuying process will be,” McClary said, “because that financing piece is locked down and you’ve addressed all the issues that could potentially be roadblocks.”

Here’s what you need to know about the most important factors to getting approved for a mortgage.

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Crissinda Ponder
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Crissinda Ponder is a writer at MagnifyMoney. You can email Crissinda here

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The 5/1 ARM: What Is It and Is It for Me?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

5/1 ARM mortgage
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Homebuying involves a lot of decisions. You choose your neighborhood, your home, your mortgage program and your down payment. But you’ll also need to decide on the structure of your interest rate — fixed or adjustable.

While most people prefer a fixed-rate mortgage, there is a market for adjustable-rate loans. Nearly 7% of all loans originated in April 2019 were adjustable-rate mortgages, according to Ellie Mae’s latest Origination Insight Report.

One common adjustable-rate mortgage is known as a 5/1 ARM. It has an initial fixed rate for five years before the interest rate starts adjusting. The rate can change every year for the remaining life of the loan.

An adjustable-rate mortgage can be a good way to get a better initial interest rate, usually lower than a traditional 30-year fixed-rate loan. But before you dive in to an adjustable-rate mortgage application, you’d better know how the changing interest rate will affect what you pay.

Here’s a guide to how 5/1 ARMs work, how they differ from fixed-rate mortgages and their pros and cons.

What’s a 5/1 ARM?

Before defining a 5/1 ARM, we should first define an adjustable-rate mortgage, or ARM. An ARM is a type of mortgage that has an interest rate that changes, or adjusts, multiple times over the life of the loan.

Different types of adjustable-rate mortgages have interest rates that change at different intervals and are limited to certain levels of increase each time. Most ARMs start out with a fixed interest rate for several years and eventually transition to a period with an variable interest rate for the rest of the term, usually a total of 30 years.

In the case of a 5/1 ARM, the mortgage rate is fixed for the first five years. That’s what the “5” refers to. Then, the mortgage can adjust each year thereafter for the remaining 25 years of the loan term. That’s what the “1” refers to, since the rate changes after one year.

Since the 5/1 ARM is a blend of a fixed-rate and adjustable-rate loan, it can also be known as a hybrid mortgage.

How 5/1 ARM interest rates adjust

Adjustable-rate mortgages are less predictable than fixed-rate loans and are directly impacted by economic factors after you’ve started repaying the loan.

Changes to the interest rate on an adjustable-rate mortgage are based on an index, which is a benchmark interest rate that reflects general market conditions, according to the Consumer Financial Protection Bureau. The most common index used for mortgages is the one-year London Inter-Bank Offer Rate, or LIBOR for short.

Mortgage lenders use the index and then add on a fixed margin to determine your interest rate. A margin is a set number of percentage points added on to the index. So, if the one-year LIBOR is 2.65% and your lender’s margin is 2.15%, your mortgage rate, or “fully indexed rate,” at that time would be 4.8%.

Interest rates on 5/1 ARMs typically start out lower than those for fixed-rate mortgages. As of mid-May 2019, the average 30-year fixed-rate mortgage was 4.07%, while the 5/1 ARM was 3.66%, according to Freddie Mac’s Primary Mortgage Market Survey.

Let’s take a look at how a 5/1 ARM stacks up against a 30-year fixed-rate mortgage after the first five years. We’ll use a hypothetical $250,000 house and assume the buyer is putting down 20%, which means they’ll borrow a $200,000 mortgage.

 

5/1 ARM

30-Year FRM

Interest rate

3.7

4.1

Monthly payment
(Principal and interest)

$920.57

$966.40

Interest paid after five years

$6,639.60

$7,406.94

Principal paid after five years

$4,407.19

$4,189.82

As shown above, because the 5/1 ARM has a lower interest rate during its fixed-rate period than the 30-year fixed does, the buyer would pay $767.34 less in interest after five years and pay down $217.37 more of the principal balance of the loan. The results could quickly reverse once the 5/1 ARM’s interest rate begins adjusting, however.

Let’s look at the 5/1 ARM (on a $250,000 home with a $50,000 down payment) after two interest rate adjustments to understand how the changes can impact the monthly mortgage payment.

 

Adjustment #1

Adjustment #2

Index

2.65%

2.8%

Margin

2.15%

2.15%

Interest rate (Index + margin)

4.8%

4.95%

Monthly payment (Principal and interest)

$1,049.33

$1,067.54

In the above scenarios, the 5/1 ARM interest rate jumps significantly higher than 3.7%. By the time the rate jumps to 4.8% and again to 4.95%, the monthly payment increases by nearly $130 and $150, respectively.

Pros and cons of 5/1 ARM

As with any financial product, there are benefits and drawbacks. Consider the following pros and cons of borrowing a 5/1 adjustable-rate mortgage.

Pros

  • ARM interest rates are usually lower than 30-year fixed-rate mortgages (and sometimes 15-year fixed-rate mortgages) for the first five years, which means you’ll pay less in interest during that time.
  • Monthly mortgage payments are also typically lower in the first five years, thanks to the lower interest rate.
  • There is a limit to how high your interest rate can increase over the life of your loan, which is called a lifetime adjustment cap. The cap is typically five percentage points, but your lender’s cap could be higher, according to the CFPB.

Cons

  • After the first five years of a 5/1 ARM, the interest rate can adjust each year and is not predictable. Although there’s a cap on how much your rate can increase the first time it adjusts, it can still be significantly higher than the fixed rate you’re losing.
  • Because your interest rate adjusts over the life of your loan, so does your monthly mortgage payment. If a higher mortgage payment would greatly impact your budget, this could cause you some affordability problems.
  • If you want to keep a fixed interest rate, you must refinance into a fixed-rate mortgage, which comes with closing costs and other fees. You must also qualify for a refinance in order to get out of your existing mortgage.

A 5/1 ARM might work for you if …

“For certain people, like first-time homebuyers, 5/1 ARM mortgages are very useful,” said Doug Crouse, a senior loan officer with nearly 20 years of experience in the mortgage industry.

Homebuyers in the following scenarios could benefit from a 5/1 ARM:

  • First-time buyers who plan to move within the first five years of owning their home.
  • Buyers who plan to pay of their mortgage very quickly.
  • Buyers who are borrowing a jumbo mortgage.

Crouse explained that with some first-time buyers, the plan is to move after a few years. This group can benefit from lower interest rates and lower monthly payments during those early years before the fixed rate changes to a variable rate.

Mindy Jensen, a real estate agent and community manager for BiggerPockets, an online community of real estate investors, agrees. “You can actually use a 5/1 ARM to your advantage in certain situations,” she said.

A 5/1 ARM could work well for someone who wants to aggressively pay down a mortgage in a short amount of time, Jensen explained. After all, if you know you’re going to pay off your loan early, why pay more interest to your lender than you have to?

“The lower initial interest rate frees up more money to make higher principal payments,” Jensen said.

Another group of people that can benefit from 5/1 ARM are those who take out or refinance jumbo mortgages, Crouse added.

For these loans, a 5/1 ARM makes the first few years of mortgage payments lower because of the lower interest rate. This, in turn, means that the initial payments will be much more affordable for higher-end properties.

Plus, if buyers purchased these more expensive homes in desirable areas where home prices are projected to rise quickly, it’s possible the value of their home could soar in the first few years while they make lower payments. Then, they can sell after five years and hopefully make a profit.

However, keep in mind that real estate is a risky investment and nothing is guaranteed.

A 5/1 ARM isn’t right for you if …

For homebuyers who plan to stay put for longer than five years, Crouse and Jensen share the sentiment that a 5/1 ARM might not be as beneficial for them.

Homeowners should also consider whether they want to be landlords in the future, Jensen added. If you decide to move out of your home but keep the mortgage and rent out your home, a 5/1 ARM may not serve you.

Additionally, if you think there’s a chance you might not be able to refinance out of a 5/1 ARM by the time your interest rate starts adjusting, you might consider a fixed-rate mortgage instead.

The bottom line

The 5/1 adjustable-rate mortgage can offer you the benefits of a lower interest rate and monthly payment, especially in the first five years of the loan. This alone may make it an attractive product for homebuyers.

Still, you can’t predict how high your interest rate can go when it transitions from fixed to variable, and that’s a budgeting concern you’ll need to consider when weighing your home financing options.

If after reading this guide you think a 5/1 ARM might be right for you, keep this list of questions in mind as you gather mortgage quotes from lenders:

  • How long do I want to live in this house?
  • Will this house suit my family if my family grows?
  • Is there a chance my job will transfer me elsewhere?
  • How often does the rate adjust after five years?
  • When is the adjusted rate applied to the mortgage?
  • If I want to refinance in five years, how much might that cost me?
  • How comfortable am I with the uncertainty of a variable rate?
  • Do I want to rent out my house if I decide to move?

Once you’ve filled in the answers to the above questions, your next step is to understand the minimum mortgage requirements for the available loan programs.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Cat Alford
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Cat Alford is a writer at MagnifyMoney. You can email Catherine at [email protected]

Crissinda Ponder
Crissinda Ponder |

Crissinda Ponder is a writer at MagnifyMoney. You can email Crissinda here

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