29-State Deal: A 5 year ARM home loan for 3.0%

House keys on top of mortgage contract

Total Mortgage Services is offering one of late summer's best deals on 5-year, adjustable-rate mortgages for borrowers purchasing or refinancing a home in 29 states and the District of Columbia.

It's charging an introductory rate of just 3.0%, with no points and $799 in lender fees.

Earlier this year, our favorite deals on adjustable-rate home loans cost as little as 2.375%.

But all mortgage rates have risen dramatically over the past several months, with the average cost of a 5/1 ARM going from a record low of 2.63% on May 1, to 3.54% in this week's survey of major lenders.

Click here to compare this deal with the best mortgage rates from scores of other lenders in your area.

The principal and interest payments for the first five years would be $422 a month for every $100,000 you borrow.

You can use our mortgage calculator to determine the monthly payments for the amount you want to borrow with this or any home loan.

This loan's interest rate caps are 5/2/5, which means it can't go up more than 5 percentage points the first time it adjusts in five years, or 2 percentage points each year after, and it can never go up more than 5 percentage points.

Of course, this kind of loan makes the most sense if you plan to sell the home before the mortgage resets. A 5-year ARM like this one gives you more time than adjustable-rate mortgages that reset more quickly.

But just in case you don't sell before then introductory rate expires, make sure you get an ARM you can still afford even if the payments go up the maximum 5 percentage points.

Total Mortgage Services (www.totalmortgage.com) is based in Milford, Conn., and enjoys an “A+” rating from the Better Business Bureau.

It's licensed to write mortgages in: Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Kansas, Massachusetts, Maryland, Maine, Michigan, Mississippi, North Carolina, Nebraska, New Jersey, New Hampshire, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Vermont, Washington and West Virginia.

To qualify for the best rate on a 5 year ARM home loan from Total Mortgage Services, you must: