Annual Percentage Rate will stay the same for the first 5 years of the loan versus changing every year. After 5 years, the rate can adjust every 6 months, depending on the market.
Features and Benefits
- Best choice if the loan amount you are looking to finance is under $510,401 and you are looking for a home loan that does not require 20% down.
- Initial Adjustment up to +/-2.00% first rate change after first five-year term.
- Subsequent Adjustment every 6 months thereafter, rate adjustment may not result in an increase or decrease of more than 1.00% from the prior interest rate.
- Rate cap at 5%. A rate cap is a limit on how much the rate can change at the end of each adjustment period over the life of the loan.
- Index = SOFR
- Margin = 3.0%
- Fixed rate conversion option is not available.