5/5 ARM

Greater Nevada Mortgage’s 5/5 ARM: An Affordable Mortgage Option for Homebuyers

Are you looking for an affordable mortgage option to help you buy your dream home? If so, you may want to consider a 5/5 adjustable rate mortgage (ARM) from Greater Nevada Mortgage. 

A 5/5 ARM is an adjustable rate loan that offers a fixed low rate for the first five years, allowing you to settle into homeownership. After five years, the interest rate may adjust up or down, and then every five years after, based on the index often impacted by other economic factors. Don’t worry, there are caps on how much your mortgage rate and monthly payment can increase at each adjustment milestone, as well as a lifetime maximum, so you can plan accordingly.  

Highlights of GNM’s 5/5 ARM:

  • Available with as little as 10% down. 
  • Eligibility with a FICO score as low as 640 (when qualifying for a GNCU membership). 
  • Fixed low interest rate for the first five years: This can provide peace of mind and make budgeting easier. 
  • Primary residence and vacation/second homes are eligible. 
  • Caps on how much your interest rate can increase at each adjustment and lifetime maximum: This helps protect you from unexpected rate hikes.  

Why Choose an Adjustable Rate Mortgage?

With a fixed rate mortgage, the interest rate will never go up. So why would you consider giving up that certainty in favor of an adjustable rate mortgage? The simple answer is to pay less at the beginning of the term of the loan. GNM’s 5/5 ARM can make sense in the following scenarios: 

  • You will be selling the home. The 5/5 ARM may be your best choice if you plan to sell or relocate before the fixed introductory period ends. This is especially true if you’re buying a starter home.  
  • You’re expecting an increase in income. Your interest rate and monthly payments will start low. But because the rate could increase after the initial five-year period, you may choose this mortgage option to coincide with receiving a money windfall or increase in income.    
  • You will be paying off the mortgage soon. There are no prepayment penalties with GNM’s 5/5 ARM.
  • You expect interest rates to drop. There is potential for lower interest rates after the first five years. Because interest rates could also rise, it is worth knowing the risks to avoid ending up with an unaffordable mortgage payment after the initial rate period expires. 

You’ll want to weigh your options carefully and choose the type of mortgage that makes the most sense for your individual situation.  

If you think you may be a good candidate for a 5/5 adjustable rate mortgage, or have questions about getting a mortgage, contact a Greater Nevada Mortgage consultant today. 

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