Question:

Should I get an adjustable rate mortgage in California?

Answer:

California is one of the high-cost areas in the US and many people cannot qualify for a fixed-rate mortgage to get an average Californian home as they are a lot expensive. Thus, they have to apply for adjustable rate mortgage as in California borrowers have better chance to get enough financing with an ARM rather than with an FRM.

Having said that, California and New York are perhaps the best places to consider adjustable rate mortgages. With house value appreciation the last several years in a row, an ARM in California seems a good bargain. Not only you can get low monthly payments, but you do not need to worry about the principal, as in a couple of years your house will most probably be worth a lot more than it is now, and you will have even built up more equity without actually exhausting your cash.

And if you get a convertible adjustable rate mortgage in California, you may rest assured should the interest go up too much, you'll be able to refinance into a fixed rate mortgage, eliminating any risk and taking advantage of the flexibility and higher loan limits the ARMs have.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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