Looking to take advantage of lower starting rates or planning a shorter stay in your home? Kristy Gannon at Ownity Mortgage helps clients across California explore flexible, cost-effective Adjustable-Rate Mortgages (ARMs) backed by over 20 years of experience in personalized mortgage solutions.
Adjustable-Rate Mortgages, also known as ARMs, offer an interest rate that starts lower than a traditional fixed-rate loan but adjusts over time. Typically, ARMs have an initial fixed-rate period—often 5, 7, or 10 years—followed by periodic rate adjustments based on market conditions. Kristy Gannon helps California borrowers understand how ARMs work, what their future payments could look like, and when this loan option might make the most financial sense.
An Adjustable-Rate Mortgages ideal for homebuyers who expect to move, refinance, or experience income growth within the next few years. It’s also great for buyers who want lower monthly payments upfront, making it easier to manage their budget early in homeownership. Kristy Gannon works with California clients to evaluate whether an ARM aligns with their timeline, financial outlook, and goals.
ARMs begin with a fixed interest rate for a set period, such as five or seven years. After that, the rate adjusts annually based on a financial index plus a set margin. These adjustments can cause the monthly payment to increase or decrease. There are also limits to how much the rate can change at once or over the life of the loan. Kristy Gannon ensures you understand all the terms, including how rate caps and adjustment periods apply to your specific loan.
Common ARMs include 5/1, 7/1, and 10/1 structures, where the first number refers to the fixed-rate term in years and the second refers to how often the rate adjusts after that. Programs may vary by lender, including options with initial interest-only payments or capped increases. Kristy Gannon will compare available ARM products to help you find the best fit for your budget and long-term plans.
The main advantage of an ARM is the lower initial interest rate, which often means a more affordable monthly payment during the early years of the loan. This makes ARMs attractive to buyers who plan to move or refinance before the first adjustment period. Kristy Gannon will help you analyze potential savings and decide whether the lower starting rate is a strategic advantage for your financial plan.
If you’re not planning to stay in your home long term or want to minimize upfront costs, an Adjustable-Rate Mortgage could be a smart option. ARMs offer flexibility, and with careful planning, they can help you save thousands over the first several years. Kristy Gannon takes the time to review your unique needs and help you decide if an ARM loan offers the right balance of risk and reward.
With over 20 years of mortgage experience, Kristy Gannon knows how to customize mortgage solutions, including ARMs, to suit each borrower’s financial strategy. She helps homeowners and homebuyers across California compare loan options, navigate changing markets, and make confident decisions that align with both short- and long-term goals. At Ownity Mortgage, Kristy delivers insight, care, and ongoing support throughout your home financing journey.
Considering an ARM? Kristy Gannon is here to help you explore the benefits, understand the risks, and make the most of your mortgage strategy.
An Adjustable-Rate Mortgage (ARM) is a home loan that starts with a fixed interest rate for a set period, followed by periodic rate adjustments based on market conditions. The rate changes according to a financial index plus a lender margin, potentially increasing or decreasing over time.
They can be if you hold the loan long-term, as the rate can rise. But if you’re planning to sell or refinance before the adjustment, they can save money. Kristy will help assess your risk tolerance.
A fixed-rate mortgage has an interest rate that remains the same for the life of the loan, providing predictable payments. An ARM starts with a lower fixed interest rate for an initial period, after which the rate adjusts periodically. Borrowers choosing an ARM benefit from lower payments upfront, but payments may increase once the adjustment phase begins.
The first number represents the number of years the interest rate remains fixed, while the second number indicates how often the rate adjusts after the fixed period. A 5/1 ARM has a fixed rate for five years before adjusting annually, while a 7/1 ARM remains fixed for seven years before annual adjustments begin.
ARM adjustments are based on a financial index, such as the Secured Overnight Financing Rate (SOFR) or U.S. Treasury rates, plus a fixed margin set by the lender. The index reflects current market conditions, while the margin remains constant throughout the loan term.
Yes, ARMs have rate caps that limit how much the interest rate can increase. The initial cap restricts the first adjustment, the periodic cap limits each subsequent adjustment, and the lifetime cap sets the maximum increase allowed over the life of the loan. These protections help prevent sudden, drastic increases in monthly payments.
Yes, if the financial index used for the ARM declines, the interest rate may decrease, resulting in lower mortgage payments. However, some ARMs include a rate floor, meaning the interest rate cannot drop below a certain level.
ARMs are well-suited for homebuyers who plan to move or refinance before the fixed-rate period ends. Investors, buyers in high-cost areas, and those expecting income growth may also benefit from the lower initial rates and flexible payment options. Borrowers comfortable with potential rate adjustments may find an ARM a cost-effective alternative to a fixed-rate mortgage.
The primary risk of an ARM is the potential for interest rate increases after the fixed period ends, which could lead to higher monthly payments. If rates rise significantly, borrowers may face increased housing costs. Understanding rate caps and planning for potential payment changes can help mitigate this risk.
Yes, borrowers can refinance an ARM into a fixed-rate mortgage before the adjustment period begins to secure a stable interest rate. Refinancing can be a smart strategy if interest rates are expected to rise or if long-term payment stability is a priority.
Yes, government-backed loan programs such as FHA and VA loans offer ARM options with specific rate adjustment protections. These programs provide additional safeguards for borrowers concerned about future rate changes.
Some ARMs may include prepayment penalties if the loan is paid off or refinanced within a certain period. Reviewing the loan terms and discussing options with a lender can help determine if an ARM with no prepayment penalty is available.
The closing timeline for an ARM loan is similar to that of a fixed-rate mortgage, typically taking 30 to 45 days. The exact timeframe depends on lender requirements, documentation processing, and market conditions.
If you don’t qualify for an ARM, alternative mortgage options may include fixed-rate loans, interest-only mortgages, or government-backed programs such as FHA, VA, or USDA loans. Working with a mortgage specialist can help identify the best financing solution based on your financial situation.
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7606 Meany Ave. Suite 103 Bakersfield, California 93308
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