bank rates

Florida Deal: 3.75% On A 5-Year ARM

First Nationwide Lending has a good deal on five-year, adjustable-rate mortgages for borrowers in Florida.

It’s charging just 3.75% with no points and $1,390 in fees.First National Lending is charging a quarter point less than the national avearage for 5/1 ARMs.

That’s a quarter of a percentage point lower than the national average of 3.99% for 5-year ARMs.

Your principal and interest payments for the first five years would be just $463 a month for every $100,000 you borrowed.

You might find an adjustable-rate mortgage that’s a little cheaper, but check its interest rate caps before you sign up.

The rates on some bargain-basement loans can go up as much as five percentage points when they reset for the first time.

This First Nationwide ARM won’t do that.

Its interest rate caps are 2/2/6, which means it can’t go up more than two percentage points the first time it adjusts in five years or two percentage points each year after, and can never go up more than six percentage points.

Of course, this kind of loan makes the most sense if you plan to sell the home before the mortgage resets.

But just in case you don’t, choose an ARM you can still afford after five years when the rates adjust.

Interest rates are at historic lows, and you have to assume they’ll be higher by the time this loan resets in 2015.

To qualify for this loan, you’ll need a down payment of at least 20%, or 20% equity in your home for a refinancing.

You’ll also need a credit score of 700 or higher and must also be applying for a conforming loan, which means you’re borrowing no more than $417,000 to $729,750, depending on where you live.

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