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What is an Adjustable Rate Mortgage?
An Adjustable Rate Mortgage (ARM) is a mortgage that has a fixed rate and monthly payment for the first five or seven years. After the initial fixed period Opens a new window, your interest rate and payments can change (up or down) depending on the margin Opens a new window and pre-selected index Opens a new window. You can apply online or over the phone and in most cases have an offer back immediately. Call us toll-free at 1-866-327-4599.
What's the minimum amount I need for a down payment?
To purchase a primary residence (the one you live in), you'll need at least a 20% down payment. For a vacation home, you'll need at least a 25% down payment.
What type of property can I finance?
Capital One can help you get a mortgage for owner-occupied properties (your primary residence) and vacation homes. These include single family homes, town homes, condos, and co-ops in New York. We can also help you get a mortgage for investment (rental) properties. These include single family homes and town homes. We cannot consider applications for leaseholds, mobile or manufactured homes, log homes, dwellings with two or more units, condotels, timeshares, properties greater than 10 acres, unimproved land, or trust-owned properties not held in a family trust.
After the fixed rate period, how do you determine my Adjustable Rate Mortgage rate?
We determine your rate 45 days before your adjustable period is scheduled to begin. Basically, we take the margin and add it to an index to arrive at the final interest rate for each adjustment period. We currently use the 1-Year LIBOR as our index. For example, if the 1-Year LIBOR is 3.50% and the margin is 2.50%, the final interest rate would be 6.00%.
How long can I lock my rate?
Once you apply for an Adjustable Rate or Fixed Rate Mortgage, our rate guarantee will automatically lock your rate for 60 days if you are purchasing or refinancing a home – for FREE. This rate guarantee means you'll be protected if rates go up.
What are Closing Costs?
We incur expenses when processing your loan, such as having a title search completed and appraising the value of your home; these are third party fees that must be paid at closing. The first page of the loan application can estimate these costs based on your specific details. If you are reviewing offers from other banks, use these estimated costs to compare and make sure you're getting the best deal.
How many years do I have to pay off my Adjustable Rate Mortgage?
Payments on the Adjustable Rate Mortgage are based on 30 years. So, you have 30 years to pay off your Adjustable Rate Mortgage.
Are there any limits as to how much my rate can adjust?
Yes. There are limits as to how much your rate can adjust, which is frequently referred to as an Interest Rate Cap Structure. There are three parts that make up a Cap Structure:
Initial Cap: The value that limits how much the interest rate can adjust – up or down – in the first year after the fixed term ends.
Period Cap: The value that limits how much the interest rate can adjust – up or down – annually at each subsequent adjustment date.
Lifetime Cap: The value that limits how much the interest rate can adjust – up or down – over the life of the loan.
For example: Let’s assume you have a 5/1 ARM with an interest rate of 4% and a Cap Structure of 5, 2, 5. Your 4% interest rate is fixed for the first 5 years and is subject to adjust a maximum of 5 percentage points at the adjustment date in year 6 (Initial Cap). Your interest rate can adjust a maximum of 2 percentage points annually (Period Cap) starting at year 7 and can’t adjust more than 5 percentage points over the life of the loan (Lifetime Cap).
The important thing to remember is that your rate can go up, down or stay the same. It can change annually after the fixed-period expires, only if the 1-year LIBOR rate changes.
What does the projected rate and payment mean that’s listed next to the current rates for the Adjustable Rate Mortgage?
The government requires us to display this information. So what does it mean? The Adjustable Rate Mortgage has a fixed rate and monthly payment for the first five or seven years. After that the rate can adjust up or down annually. As a result, we’re required to display what the rate and payment will be after the fixed rate period ends. Keep in mind, since we don’t know what rates will be in the future, the actual interest rate and payment may be higher or lower.
What are estimated escrow costs?
Based on the information you provided, the estimated escrow amount we show is for two months. The actual amount will be finalized when we process your loan application and receive the information for the amount of your property taxes, homeowners insurance, and their payment dates. As soon as we get this information, we’ll provide you with a document called an “escrow analysis” that will show you the detailed breakdown of your escrow amount.
What are points?
Points are costs that can be added to or subtracted from your closing costs based on our lending guidelines (i.e. credit score and home value). Typically, 1 point equals 1% of your loan amount. The amount of points that are charged may change once we verify the information submitted in your application.
What is an Index?
An index is a measure of prevailing market interest rates. The interest rate on an Adjustable Rate Mortgage (ARM) is adjusted based on the rise or fall of an index. The monthly payments on an ARM will increase or decrease accordingly.
What is a Margin?
The margin is the amount the lender adds to the index to determine the interest rate for the loan. In general, margins do not change over the life of the loan.
What is an escrow analysis?
An escrow analysis is a periodic examination of an escrow account to determine if the current monthly deposits will provide enough money to pay taxes, insurance, and other bills.
What is the contact information for the various departments across Home Loans?
You can direct general mortgage questions and comments to firstname.lastname@example.org Opens a new window
How do I arrange to have a property inspection completed?
If you'd like to have a property inspection completed, simply contact us (800-933-9100 Option 2) and we'll arrange for an inspection company to contact you within 3-5 business days to schedule an appointment. If you're making repairs to your property and need an inspection, contact us approximately one week before the repairs are 90% complete.
What is an Adjustable Rate Payment Option Loan?
An Adjustable Rate Payment Option Loan, also known as a Cashflow Option Loan, is an Adjustable Rate Mortgage that allows you to choose up to four payment options each month.
How can I tell if my loan is assumable?
Can I add someone's name to my mortgage?
Yes, you can add someone to the title of the property by executing a deed of transfer. You may want to consult an attorney to have this done. You can only add someone to liability for the loan through an assumption Opens a new window or refinance.
How do I provide you authorization to discuss my loan(s) with my spouse or a third party?
In order to discuss your loan with a third party or spouse who isn't on the loan, we need your signed authorization. Please send a letter to our Customer Service Opens a new window department, signed by all parties on the loan, with the specific names of those authorized to receive information.
How do I remove my ex-spouse from my loan?
An ex-spouse’s name can be removed from our billing records by providing us with a copy of the divorce decree and deed transferring title. The ex-spouse can only be relieved of liability for repayment of the loan through an assumption Opens a new window or refinance.
How do I report an error on my credit report?
If you believe there is an error on your credit report, send a copy of the report with a written request describing the error in detail to our Customer Service Opens a new window department in Eagan, MN.
When is my mortgage reported to the credit bureau?
All mortgage loans, both current and delinquent, are reported to the credit bureaus on a monthly basis.
What do I do if I find an error on my mortgage account(s)?
In case of an error or questions about your electronic transfers or your monthly mortgage statement, call our Customer Service Department at 1-800-933-9100, option 2 as soon as possible. Please be prepared to provide the following information when you call:
Why do I need to provide information about my Home Owners Association?
Remember this is an optional field. We need to gather this information anyway, but the sooner we get this information the sooner we can begin processing your loan.
How can I change my name?
To change your name due to marriage, divorce, etc., be sure to update your name with the Social Security Administration (SSA) first. Then you can give us a call at 1-888-464-0727 from 8 AM to 8 PM and an Associate will help you out. Keep in mind, we may need more documentation if you’re changing your first and last name.
You can also send in a written request signed and dated within the last 60 days along with a copy of the legal document that includes both your old name and new name by:
Mail: Capital One 360
P.O. Box 60
St. Cloud, MN 56302
If you need to update a misspelling or want to add a middle initial, give us a call and an Associate will help you out.
Who can I contact if I have questions on the Servicemembers Civil Relief Act (SCRA)?
Questions about the Servicemembers Civil Relief Act (SCRA)? Learn more Opens a new window or contact us any of the following ways:
How can I request more information or report a possible error with the servicing of my loan?
To request more information or report a possible error regarding the servicing of your loan, you must send a letter to:
Capital One, NA
Please be sure to provide the following information with your request: