10 years ARM mortgage rate higher then 30 year fixed?
 

We are getting mortgage through the subsidiary of the builder that is
building our new house. When we asked about the current rate on 30
year fixed and 10 year ARM (both jumbo) the mortage cancellor assigned
to us gave the rates where 10 years ARM was much higher (more than
0.5%) then 30 year fixed. Common sense tells me that this cannnot be
right yet the cancellor insists that sometimes it can happened. Is it
really could happen (checking on other mortgage companies sites 10
year ARM is always lower then 30 year fixed rate, as expected) or
there is something wrong with the mortgage company?

Thanks in advance,
Val

10 years ARM mortgage rate higher then 30 year fixed?
 

That makes perfect sense.

The big difference between an ARM and a 15/30 fixed is that the bank
generally holds the ARM for the entire term, while a fixed they sell
on the secondary market after the lendee proves that they are a good
risk (2-3 years typically).

What you're asking for is the rate for a non-conforming (jumbo) loan,
which is over $330k, and it's something the bank is going to hold in
its portfolio for the entire term of the ARM. Even if have an 820
beacon/fico, the bank is gonna hold more (in your case, half a point)
because a much large sum of THEIR MONEY is going to be tied up on your
mortgage.

If you're not happy with the rates, go to a mortgage broker and shop
your credit score around, but don't wait too long...

(vahania) wrote in message . com...
We are getting mortgage through the subsidiary of the builder that is
building our new house. When we asked about the current rate on 30
year fixed and 10 year ARM (both jumbo) the mortage cancellor assigned
to us gave the rates where 10 years ARM was much higher (more than
0.5%) then 30 year fixed. Common sense tells me that this cannnot be
right yet the cancellor insists that sometimes it can happened. Is it
really could happen (checking on other mortgage companies sites 10
year ARM is always lower then 30 year fixed rate, as expected) or
there is something wrong with the mortgage company?

Thanks in advance,
Val