[UPDATE: This criteria was taken from Ohio Saving Bank’s 2/1 ARM program from years ago. We are currently unaware of any lenders offering 2/1 adjustable rate products. The information on this page discusses how these loan programs functioned.]
For many years, 2/1 adjustable rate mortgage products were offered as programs for those who had past credit issues. The thought process being that two years would give a person enough time to repair their credit and then refinance. Many people feel confident that they are only going to be in their homes for a couple of years and 2 year adjustable rate loans may offer a lower rate than other fixed rate and adjustable rate products. Often times these customers feel stuck between a one year adjustable rate mortgage and a 5 year ARM. Today, very few companies still offer 2 year ARM products so finding these programs may require a significant amount of research.
Potential 2 Year ARM Program Highlights:
- Some have had annual adjustment limited to 2%.
- Lifetime cap adjustment of 6%.
- Purchase and Rate & Term Refinances: 1-2 unit primary residences and 1 unit second homes – 10% down often required
- 3-4 Unit primary residences – 20% down often required
- 1-4 unit investment properties – 25% down often required.
Other adjustable rate financing solutions to consider: