Is it possible to be approved for ARM but not Fixed Rate?

[Anonymous]

Hello everyone,

We're currently building a new home in another state and are self-employed. We were pre-approved then approved with loan committment (20% down), but noticed that we were given 5/1 ARM. I read about the pros and the cons about an ARM, and I'm leaning towards possibly trying to avoid it. Just emailed my lender but due to the time difference, I'm probably not going to hear back until tomorrow and I'm getting antsy. 

- Do you know why we were only given the ARM option, instead of a traditional fixed rate like most? - Is it because we're self employed, business Out-of-state? 

- Is it possible that we were approved for an ARM, but will otherwise be declined if we attempted to apply for a fixed-rate?

Any advice, or experience is greatly appreciated!

[JVille]

Just tell your lender you applied for a 30 yr fixed rate loan. Likely someone just pushed the wrong button.

[MauiMan85297]

I think if you were qualified under the ARM product you should be golden at a fixed rate, probably pushing a certain product but just let them know you're not comfortable with an ARM.

With an ARM they will qualify at the greater of the Fully Indexed Rate or the Note Rate

[CreditInspired]

@Mauiman

What does your last paragraph mean? Can you give an example using an interest rate? Thanks

[MauiMan85297]

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@CreditInspired wrote:
@Mauiman

What does your last paragraph mean? Can you give an example using an interest rate? Thanks

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A fully indexed interest rate is a variable interest rate that is calculated by adding a margin to a specified index rate.(rate is 4% but has a margin of 2%, they would qualify on the 6%)