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Ready to start your home buying journey? Apply now and get pre-approved for your mortgage.
Purchase Rates
Know the rates, know your options. Start building your homeownership plan today.
Monthly Mortgage Calculator
Get a clear picture of your monthly mortgage payment using your rate, credit score, and down payment information.
Affordability Calculator
Not sure what fits your budget? This calculator factors in your income, debts, and down payment to help you find the right price range.
Refinance
Apply Now
Ready to lower your rate or tap into your equity? Apply now and start your refinance journey with confidence.
Refinance Rates
Rates can change fast. See today’s options and discover potential savings on your mortgage.
Refinance Mortgage Calculator
Wondering how refinancing will affect your monthly payments? See how much you can save.
Cash-Out Refinance Calculator
See how much equity you can tap into. Estimate your new mortgage payment and compare loan options.
Rates
Resources
Calculators
Free, interactive mortgage calculators that can help you along the journey toward your home ownership goals.
Blog
Learn more. Stress less. Our blog breaks down what you need to know to buy, refinance, or plan ahead.
FAQs
Check out our FAQs to learn more about Total Mortgage, mortgage lending, home refinancing, and more.
Loan Programs
Navigate all our programs and find the perfect loan for you.
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About
7/1 ARM
<p class="MsoNormal">This adjustable rate mortgage offers a very low interest rate for the first 7 years, after which the rate resets.</p>
Benefits
Lower Initial Payments
Enjoy lower monthly payments during the first seven years due to lower initial interest rates.
Potential for Even Lower Payments
If rates decrease during the adjustment period, your monthly payments could become even lower.
Flexibility for Short-Term Homeowners
Ideal for those planning to sell or refinance within seven years, allowing you to benefit from lower rates.
Fixed Rate Period
Enjoy seven years of predictable payments before any rate adjustments occur.
7/1 ARM Mortgage Information
<p>The 7/1 ARM combines features of adjustable rates and fixed-rate mortgages, offering a fixed interest rate for the first seven years before adjusting annually. To better understand how this ARM can fit into your homeownership plans, you can start by <a href="/apply">speaking to one of our seasoned experts</a>.</p>
How Does a 7/1 ARM Work?
<p>Here's an example of how a 7/1 ARM works:</p><ul><li>If you close the loan on April 1, 2024, the interest rate remains constant until March 31, 2031.</li><li>From April 1, 2031, the rates start to adjust annually.</li><li>The new rate is typically based on an index (like SOFR) plus a margin.</li><li>Your loan agreement will specify maximum and minimum rates, as well as adjustment caps.</li></ul>
Eligibility Criteria
<p>To qualify for a 7/1 ARM, you typically need:</p><ul><li>A credit score of 620 or higher</li><li>A debt-to-income ratio of 43% or less</li><li>The ability to make a 3% down payment</li></ul><p>Lenders will also assess your income, employment history, and other financial records.</p>
Current 7/1 ARM Rates
<p>Interest rates for 7/1 ARMs change constantly. At Total Mortgage, we update our 7-year ARM rates twice daily so you can take advantage of the lowest interest rates at the right time. Check our website or speak with a loan officer for the most current rates.</p>
Pros and Cons of a 7/1 ARM
<p>Understanding the advantages and disadvantages of a 7/1 ARM can help you make an informed decision.</p>
Pros of a 7/1 ARM
<ul><li>Lower initial monthly payments due to lower starting interest rates</li><li>Potential for even lower payments if rates decrease during the adjustment period</li><li>Seven years of predictable payments before any adjustments occur</li></ul>
Cons of a 7/1 ARM
<ul><li>Potential for higher payments if rates rise during the adjustment period</li><li>Complex loan structure with various components like rate caps, margins, and indexes</li><li>Risk of becoming an interest-only trap if not managed properly</li></ul>
Is a 7/1 ARM Right for You?
<p>A 7/1 ARM might be a good choice if:</p><ul><li>You don't plan to stay in the home for more than 7 years</li><li>You expect interest rates to fall in the coming years</li><li>You anticipate your earnings to increase after seven years</li><li>You're comfortable with some uncertainty in exchange for initial savings</li></ul>