No Closing Costs on a 5/5 ARM
Rates as low as
3.500% / 4.818% APR
Down payments as low as 5%
with Mission Fed paying your Mortgage Insurance on Loans up to $625,500
Increase your purchasing power
- Low initial payments
- The benefits of both fixed and ARM
Get started with a 5/5 ARM today!
We’ll help you determine what works best for you! Give us a call at 858.546.2039 or 800.500.6328, ext. 2039.
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What is a 5/5 ARM?
5/5 ARMis an adjustable rate mortgage that starts with a low fixed rate for the first five years of the loan, after which the interest rate can be adjusted once every five years. Because it is an adjustable rate loan, your monthly payments can become larger or smaller when the rate is adjusted. If your 5/5 ARM is a no closing cost home loan, the lender pays some or all of the closing costs.
How is a 5/5 ARM different from other loans?
5/5 ARM rates are often very low for the first five years of the loan, allowing you to keep your monthly payment manageable. Since you know your rate won’t change for the first five years, you can plan to pay as much as you can while the interest rate is low and the payment is probably less. Additionally, although it is an adjustable rate loan, the rate will only change once every five years, helping you avoid potential increases in your rate and payment. Finally, though your payments could go up after an adjustment, 5/5 ARM rates can only be adjusted by a specified percentage per adjustment (often two percent), and a maximum percentage over the life of the loan (often five percent), so you’ll be able to budget for the changes, even if you don’t know exactly what the rate will be.
Why should you choose a 5/5 ARM over other loans?
A 5/5 ARM can save you money on interest, particularly if you plan to sell your home within the initial low interest period, or if you’re willing to pay more than the monthly payment during the initial low interest rate period. If the market improves, you may even see your rate and payment go down! Also, keep in mind that if rates go up significantly and your payment becomes hard to manage, it may be possible to refinance your loan into a new ARM or a fixed rate loan for a better rate.
What does no closing cost loan mean, and why might they be helpful?
At Mission Fed, a no closing cost Home Loan means that we pay your closing costs up to $10,000 (please see the details below). This helps you write a smaller check at closing, so you can keep some of your money for home decor upon signing all of your documents. No closing cost loans are especially helpful for borrowers who have limited funds available at closing. Make an appointment with us today, and learn about how a no closing cost Home Loan can benefit you!
We like to be clear about the disclosure information, too. APR=Annual Percentage Rate. APR and Rate are current as of 5/21/18. A payment on a $500,000 30-Year adjustable rate loan at a rate of 3.500%, APR of 4.818% and 72% Loan-to-Value (LTV) is $2,245.22 per month for the first 5 years. Rates are subject to increase or decrease once every 5 years based on the weekly average of the 5 Year Constant Maturity Treasury (CMT) index rate as made available by the Federal Reserve Board plus a margin of 2.75%. Maximum cap of 2% every 5 years and 5% over the life of the loan. Payments do not include amounts for taxes and insurance. Your actual payment will be greater. For loan amounts with an LTV of 90% or greater, an escrow account for the payment of taxes and insurance will be required. Flood Insurance Premiums may be required on loans of any amount. For qualifying applications on primary residences located in San Diego County, Mission Fed will pay non-recurring closing cost, including, but not limited to: lender’s title insurance, title services, appraisal, tax service, credit report, flood certification and recording fees. Credit does not include prepaid interest, homeowners insurance, initial escrow deposit, owner’s title insurance, or city and/or county transfer tax. Maximum closing costs paid for you by Mission Fed will be $10,000 or the actual payment charged for services (whichever is less) and will appear as a credit on your Closing Disclosure. A prorated recoupment fee for closing costs paid by Mission Fed will be added to loan payoff amount if the loan is paid off within 3 years of loan closing date. Recoupment fee will be prorated monthly in equal amounts. Offer good for a limited time only. No buyups/buydowns are allowed. Other restrictions may apply. Programs, rates, terms, conditions and services are subject to change without notice and may vary based on credit qualifications and collateral. Visit a branch or call us for details. 5/18