| 5/6 ARM SOFR |
| Initial fixed interest rate for 5 full years; rate adjusts every 6 months thereafter.
Allows for higher loan amount qualification and enhanced buying power. |
| You plan to stay in your home a short period of time.
You want to keep your payments low.
You want to qualify for higher loan amounts with lower interest rates.
You want the stability of a fixed monthly payment for first 5 years of loan. |
| It's riskier if you don't expect your income to increase over the initial 5-year period to cover the change in monthly payment.
Interest rate can rise above the current fixed rates over time. |
| Rate caps = 2% on the first adjustment, 1% every 6 months thereafter and 5% over the lifetime of the loan.
Index = FRBNY 30-Day Avg SOFR
Margin = 3.00%
Non-convertible
Assumable with lender approval |