what's the minimum credit score required for an fha 5/1 arm?

We really don't have a minimum credit score for FHA, but circumstances follow. Give me a call and we will see what we can do for you Maureen. Thanks!

Maureen,With a 5/1 ARM, the rate is FIXED for the first five years of the loan, and then can adjust up or down based on prevailing rates after the initial period. The rate changes take place once per year. As far as minimum credit scores, it depends on the lender. Our general rule is 640 minimum, but we will accept scores of as low as 600 depending on compensating factors (low debt ratio, assets held in reserve, bad credit items being older but recent payment history good, etc). Feel free to reach out to me to discuss your particular situation in detail.

That would depend on your amount you are putting down, but most lenders can do to a 620 fico score. ARM loans dont change daily, most arms are set for a min period of time that is fixed, such as 5 years on the 5/1 arm, then your loan will adjust each year. You would be notified in advance of any payment/rate change by your lender. Rate change daily, that is what you are seeing, but once you lock and fund your loan, on a 5/1 arm, your payment/rate is fixed for that 5 year period.

Hi Maureen, in a 5/1 arm the interest rate is locked for the first 5 years and cannot change during that period. So if your goal for home ownership is a shorter period of time, an ARM may be perfect for you. The minimum credit scores vary from bank to bank but usually we would consider 640 to be the minimum. Please feel free to contact me with any further questions that you may have 262-754-4005 Dave

In theory, a few lenders will allow lower credit scores, but in reality, if you don't have at least a 620, you will have trouble getting approved. The VA 5/1 adjustable loan is fixed for the first 5-years, and then can change once a year thereafter. www.WI-MortgageBroker.com

Maureen,You are correct, the advantage of an adjustable rate loan versus a fixed rate loan is that the interest rate is lower (at least during the initial fixed rate portion). You have to determine whether the savings you will have during the first five years outweighs the risk that you'll be in the home longer than anticipated and may be subjected to a higher rate and monthly payment in year six and beyond.

The appeal with an ARM is the lower rate. The savings that you will realize in the first five years should outweigh a fixed rate even if the rate rises in year six.

The appeal with an ARM is the lower rate. The savings that you will realize in the first five years should outweigh a fixed rate even if the rate rises in year six. There are "caps" or maximum adjustments set in place so you will know the maximum amount the rate can adjust for every year beyond the initial 5 year locked period.