Conventional & Government
Agency Adjustable-Rate
Conventional ARM (5/6, 7/6, 10/6)
Fixed introductory period (5, 7, or 10 years) then adjusts every 6 months based on SOFR index.
Available throughout Southern California through Francisco Williams, CCIM, NMLS #1858674.
620
Min FICO
95%
Max LTV
full doc
Docs
Ideal borrower
Borrowers planning to move, refinance, or pay off within the fixed period.
Program highlights
- Lower starting rate than 30-yr fixed
- Rate caps limit adjustments
- Convert strategy: refinance before first adjustment
Typical uses
- Short-term ownership
- Cash-flow optimization
Frequently asked questions
- When does an ARM make sense vs. a 30-year fixed?
- An ARM makes sense when you're confident you'll sell or refinance before the first adjustment. If you're buying a starter home you'll outgrow in 5 years, a 5/6 ARM with a 0.5–1% lower starting rate can save substantial money during the fixed period. For your 30-year home, a fixed-rate loan removes the reset risk.
- How much can my rate adjust on an ARM?
- Adjustment caps: typically 2% at first adjustment, 2% at each subsequent adjustment, and 5% over the life of the loan. On a 7/6 ARM starting at 6%, the maximum rate in year 8 would be 8% (capped), and the lifetime ceiling would be 11%.
- What index is used to set the new rate after adjustment?
- Current conventional ARMs are indexed to SOFR (Secured Overnight Financing Rate) + a margin (typically 2.75%). The margin is fixed for the life of the loan; SOFR moves with market conditions.
Program details shown are representative guidelines and subject to individual lender overlays and CFPB / agency requirements. Rates shown are illustrative and subject to change without notice. Actual rate, APR, and terms will depend on creditworthiness, loan-to-value, property type, occupancy, loan amount, loan program, and other factors. Not all applicants will qualify.