Financing in Venice>Question Details

John White, Home Owner in Franklin, MA

what does the 5.00/2.00/5.00 mean on a 5/1 arm mortgage?

Asked by John White, Franklin, MA Wed Mar 21, 2012

0 votes Share Flag Financing in Venice

Help the community by answering this question:

Answers

2
Hi John,

It means that the first year your mortgage can adjust, the rate can adjust by up to 5% so if your rate is 2.5% it could go as high as 7.5%. The second number (2) is the maximum your rate can go up each year after the first adjustment. The last number (5) is the life time cap which means the maximum your rate can go up by over the life of your loan is 5%.
1 vote Thank Flag Link Wed Mar 21, 2012
John, why are you getting an ARM at all? Rates are crazy low right now, and are not likely to stay this low for long.
0 votes Thank Flag Link Wed Mar 21, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer