Explore Flexible Home Financing with PDCU’s 5/6 and 10/6 Adjustable Rate Mortgage (ARM) Loans
7/1 and 10/10 Adjustable Rate Mortgage (ARM) Loans
Mortgage rates have gone up, but you can take advantage of a lower initial interest rate with a 7/1 or 10/10 Adjustable Rate Mortgage (ARM) loan from People Driven Credit Union! At People Driven Credit Union (PDCU), we understand that buying a home is one of your most significant financial decisions. We offer flexible Adjustable Rate Mortgage loans to help you achieve your homeownership dreams while managing costs effectively. Our 7/1 and 10/10 ARM loans provide competitive initial interest rates, making homeownership more affordable.
Adjustable Rate Mortgage Comparison:
7/1 ARM Loan
Initial Rate Period: Enjoy a fixed interest rate for the first five years. |
Adjustment Period: The rate adjusts every 6 months after the initial five-year period. |
Benefits: Lower monthly payments for the first five years, ideal for those planning to sell or refinance before the rate adjusts. |
10/10 ARM Loan
Initial Rate Period: Enjoy a fixed interest rate for the first ten years. |
Adjustment Period: The rate adjusts every 6 months after the initial ten-year period. |
Benefits: Longer period of stable, lower payments, suitable for buyers who want a predictable payment for a decade. |
Why Choose a PDCU ARM Loan?
- Lower Initial Interest Rates: Reduced monthly payments during the fixed-rate period
- No Prepayment Penalty: Refinance or pay off your mortgage early without penalties
- Easy Online Application: User-friendly online application makes securing your loan quick and convenient
Important Considerations
- Rate Adjustments: After the fixed-rate period, your interest rate may change every 6 months, affecting your monthly payment.
- Future Refinancing: While the initial lower rates are attractive, consider your long-term plans. If rates change significantly, refinancing may be an option.
Eligibility
Our 7/1 and 10/10 ARM loans are available for both new home purchases and refinancing of existing mortgages.
All applications are subject to credit and property approval, and additional restrictions may apply.
Apply Today
Ready to explore the benefits of an Adjustable Rate Mortgage? Apply online today, scan the QR code below, call us at (248) 263.4100, or email us for more information.
(248) 263.4100
Frequently Asked Questions
Yes, many borrowers choose to refinance their ARM to a fixed-rate mortgage before the adjustable period begins to lock in a stable interest rate and predictable monthly payments.
Consider your financial situation, how long you plan to stay in the home, and your risk tolerance for potential interest rate changes. ARMs can be a good choice if you plan to sell or refinance before the adjustable period begins or expect interest rates to remain stable or decline.
Some ARMs may have prepayment penalties, but People Driven Credit Union does not. You can refinance or pay off your Adjustable Rate Mortgage with PDCU early without any prepayment penalties.
Yes, ARMs often have caps that limit how much the interest rate can increase at each adjustment period and over the life of the loan. These caps provide some protection against large payment increases.
ARM interest rates adjust based on a specific index (such as the Treasury index) plus a margin set by the lender. When the index rate changes, the interest rate on your loan adjusts accordingly.
The main risk with an ARM loan is that your monthly payments can increase if interest rates rise. Understanding the potential for payment changes is important to ensure that you can afford higher payments if the rate adjusts upward.
ARMs typically offer lower initial interest rates compared to fixed-rate mortgages, which can lead to lower initial monthly payments. This can be beneficial if you plan to sell or refinance before the adjustable period begins.
The initial period is when the interest rate on an ARM is fixed. After this period, the rate adjusts at regular intervals. For example, a 5/6 ARM has a fixed rate for the first five years and then adjusts every six months.
ARMs are often described with two numbers, such as 5/6, 7/6, or 10/6. The first number indicates the initial fixed-rate period (in years), and the second number indicates how often the rate will adjust after the initial period (in months).
Unlike a fixed-rate mortgage, where the interest rate remains constant throughout the loan term, an Adjustable Rate Mortgage has an interest rate that adjusts periodically. This means your monthly payments can increase or decrease over time based on changes in the interest rate.
Disclosure
*Rates may vary and payment may increase after consummation.
*Available on all purchase or refinance applications for a primary residence using a conventional 7/1 or 10/10 ARM loan product with People Driven Credit Union. This is not a commitment to lend. AII lending products are subject to credit and property approval. Additional restrictions may apply. Refinancing an existing mortgage loan may cause the total finance charges to be higher over the life of the loan. Rate may increase after consummation.
People Driven Credit Union
24333 Lahser Road, Southfield, MI 48033
Phone: (248) 263-4100
NMLS ID# 776727
Equal Housing Opportunity
For licensing information, please visit www.nmlsconsumeraccess.org.
Take advantage of our 7/1 and 10/10 ARM loans to secure a lower initial interest rate and enjoy the flexibility you need in your home financing journey. Rates may vary, and payments may increase after consummation.
Leaving Our Website
The link you clicked will take you to one of our trusted partner websites. You are leaving the People Driven CU website. The website you have selected is an external one located on another server. People Driven CU has no responsibility for any external website. It neither endorses the information, content, presentation or accuracy nor makes any warranty, express or implied regarding any external site. Thank you for visiting People Driven CU’s website.
