Scott Storace - Branch Manager, 100 Pacifica Drive Ste. 140, Irvine CA 92618 NMLS #226339 949.973.0141

"From the minute you call me to the minute we close, I have your back. No hassles, no banker’s hours & quick response times." - Scott Storace

  • Home Loans up to $3,000,000
  • Interest Rate Float Down Option
 

Have Questions? Call 949.973.0141

Let’s Get Pumped For Portfolio Jumbo ARM’s

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Check Out Our Portfolio Jumbo ARM’s!!

Orange County, CA – ‘Portfolio Jumbo ARMs’ — technically speaking, would be any adjustable-rate mortgage for an amount over $625,500 (or $729,750 for an FHA-approved loan) that is owned in a private portfolio. While adjustable-rate mortgages suffered a bad rap during the economic meltdown, there is still plenty of demand for them. It’s just up to us lenders to make sure that the people doing the demanding understand what they’re getting into.

What You’re Getting Into

‘What they’re getting into’ is a mortgage that will have a low, fixed rate for a period of time, usually 5 or 7 years. Then, after that, the rate may be adjusted, usually every year, thereafter. If the market has gone, the rates go up. If the market has gone down, the rates go down. The ARM consists of 2 pieces that make up fully indexed rate. These are the index and margin. The index is typically a floating published rate. When the fixed margin is added to it you have the full interest rate. Either way, whether rates are rising or falling, there’s typically a cap on how high up or down they can go at each adjustment. This is done so you don’t end up with a monthly payment that’s 50% higher overnight.

Many adjustable-rate mortgages also offer a ‘teaser rate’, or a very low rate that lasts for a year or two at the most. Then it moves up to the ‘standard’ fixed rate for that ARM. Once the fixed-rate period is over, the ARM adjusts from there.

The Arms Race is On

ARMs are becoming popular again. The general idea is that you use an ARM to buy a home that you fully intended to sell before interest rate adjusts. You get the reduced interest rate for the period of time you’re in the home. Another strategy is to use them for periods of time where rates are high, but you believe they will fall in the future.

It’s also trending for jumbo loans to refinance into an ARM, knowing that it will net them several years of low payments up front and that they’ll be able to handle the payments even if they adjust upward later. Particularly if they believe their income will increase once the fixed period of their new ARM runs out. Linking ARM in ARM as it were.

Because of the increase in popularity, new jumbo ARM’s are popping up around the country, including here in Orange County.

New Portfolio Jumbo Arms from PrimeLending

PrimeLending is offering a new portfolio Jumbo ARM program that can net you a mortgage of up to $2.5 million. With 20% down and superior credit, you can get a 5/1 ARM or a 7/1 ARM with unbelievable rates. Since it’s a portfolio loan the guidelines are determined by PrimeLending and so are the rates. The rates on these portfolio jumbo Arm’s are incredible. There are the requirements:

  1. Purchases and rate/term refis only.
  2. No cash-out refis.
  3. Primary residences only; no investments or 2nd homes.

If you can handle those simple restrictions, and you’re looking for a place you can own for a short while, our portfolio Jumbo ARM program can be just the thing you need. Contact me to learn more.

Scott Storace

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