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Could a 5/1 ARM Be Right for You?

 

A 5/1 ARM may be an option whether you're buying your next home or refinancing your current mortgage. We can compare your loan options and help you understand the potential short- and long-term costs so you can decide what fits your plans.

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By submitting this form, I/we agree to your Privacy Policy, Email and Mobile Policy, Terms of Use and authorize Churchill Mortgage Corporation and/or their Preferred Provider for our area and/or The Churchill Agency to receive the above information to assist in obtaining a home loan.

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How a 5/1 ARM Home Loan Works

From your initial fixed rate to what happens after year five, knowing what to expect can help you plan ahead and choose the next step that fits your goals.

Fixed Rate for 5 Years

 Enjoy a fixed interest rate and predictable payments during the initial five-year period.

Plan Ahead for Year 5

Before your fixed period ends, you can explore refinancing or prepare for your rate to adjust.

Choose Your Next Step

Refinance, move, or continue with your ARM loan based on what fits your plans.
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Can my rate change during the first five years?

No. With a 5/1 ARM, your initial interest rate is fixed for the first five years.

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What happens after five years?

After the initial fixed period, the interest rate can adjust according to index, margin, adjustment schedule, and caps established by your original loan terms. 

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Can my payments go up?

Yes. If the interest rate increases after your initial five-year fixed period, your principal and interest payment can increase. That's why it's important to understand both the initial savings and the potential future adjustments, as well as to stay in contact with your Home Loan Specialist.

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Can I refinance later?

Yes, you have the option to refinance before the initial fixed-rate period ends if you qualify. Whether refinancing makes sense will depend on factors such as available rates, your financial situation, and how long you plan to stay in the home.

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Can an ARM rate go down?

Yes.  Depending on movements in the applicable index and the terms and limits of your loan, an adjustable rate may increase or decrease after the initial fixed-rate period.