5/6 ARM for Self-Employed Borrowers: Key Considerations
Why consider an adjustable-rate mortgage?
A mortgage decision is about more than the rate on day one. Some borrowers value a defined initial rate period because it gives them a window to plan around their expected housing timeline. For eligible self-employed borrowers, AAA Lendings' Self Prepared P&L/WVOE program includes a 5/6 adjustable-rate mortgage option that can be considered alongside the borrower's income documentation and long-term plans.
Rate snapshot — October 26, 2026: Self Prepared P&L/WVOE rates start at 6.250% for the 5/6 Arm and 6.500% for the 7/6 ARM, before applicable adjustments. The 5/6 ARM is listed in CA, NV and TX; the 7/6 ARM in CA, CO, GA, IL, TX, VA and WA. Actual pricing depends on the borrower and loan scenario; APR may vary. Rates and fees are subject to change.
Understand the 5/6 structure
A 5/6 ARM starts with an initial five-year rate period. After that period, the interest rate can adjust every six months according to the loan's index, margin, and adjustment limits. The program uses the 30-day average SOFR index and a 3.000% margin, with a 2/1/6 cap structure shown in the current program materials. These terms determine how adjustments are calculated; they do not predict where future rates will go.
Pair the loan structure with the right documentation
Eligible self-employed borrowers may use a self-prepared profit and loss statement without needing a CPA-prepared P&L. This can reduce reliance on a particular document-preparation route while keeping the file subject to normal program review. Business licenses and history, current year-to-date financials, supporting records, assets, reserves, credit, and property details remain important. The lender may request additional documents to verify the scenario.
When the 5/6 ARM may be worth reviewing
A borrower who expects to sell, refinance, or reassess housing plans within the initial rate period may want to compare a 5/6 ARM with other available options. That is not a guarantee that the loan will be cheaper or that refinancing will be available later. Future rates, home values, credit, income, and program eligibility can change. Borrowers should be comfortable with the possibility of payment changes if they keep the loan beyond the initial period.
Make the comparison specific to you
The best starting point is a complete scenario review. Consider loan amount, occupancy, property type, credit profile, reserves, and how long you expect to keep the mortgage. AAA Lendings' team can review current program requirements and help determine whether the 5/6 ARM is an appropriate option for an eligible borrower.
Ask AAA Lendings to review your self-employed mortgage scenario and compare the 5/6 ARM with other eligible options.
Program availability, qualification, rates and terms vary by state, borrower profile, property type, loan purpose, and current guidelines. Rates and fees are subject to change without notice. Contact AAA Lendings for current program details.