With an Adjustable Rate Mortgage, the interest rate may change in relation to an index and payments go up or down accordingly.
If you don’t plan to stay in your home for a long time, you may want to consider an ARM, which typically has a lower initial interest rate than a fixed rate, and you may save money on interest charges. The money you save could be put toward retirement, paying off debt, building an emergency fun, and more.
With a Fixed Rate Mortgage, the interest rate and monthly payment of principal and interest stay the same for the life of the loan.
The adjustable rate loan that only adjusts one time!
For many homebuyers, lower monthly payments offer the opportunity to afford a bigger home. Adjustable rate mortgages like the 15/15 ARM RateBuster Loan typically offer a lower initial interest rate than other 30-year fixed rate loans. This lower interest rate results in lower monthly payments.
What does this mean?
The same house financed with a 15/15 ARM results in lower monthly payments within the first 15 years than the same home financed with a 30 year jumbo fixed mortgage. If you are planning to move within the next 15 years, this might be the best product for you.
Once you know how much money you’re qualified to borrow, it’s worth it to look at the difference a 15/15 ARM RateBuster Loan could make. You could be able to afford a much bigger home.
About the 15/15 ARM
As with any ARM, the rate will remain the same for the first period (15 years) and then adjust, unless you have paid off or refinanced the loan by the time the initial payment period ends. And as with any ARM, there is always the risk that interest rates will have gone up by the time the period ends. But with careful planning, you can afford a bigger home and still end up staying within your budget.
A 5/5 ARM with Democracy FCU helps you lock in a monthly payment and interest rate that will not change for 5 years; every 5 years with a 5/5 ARM, the interest rate is adjusted. Adjustments fall in years 6, 11, 16, 21 and 26.
3% down payment; 10/1, 7/1 or 5/1 ARM
Once you have an idea of how much home you can afford and what you are looking for, the home buying process begins! Democracy FCU is here to answer all of your home buying questions and guide you along the way until you have your keys in hand!
Less Costly than an FHA Loan
No pre-payment penalty
5 = Rate can adjust no more than 5% over the initial rate; 2 = each year from that point, the rate cannot adjust more than 2% either up or down; 5 = the rate has a lifetime cap of 5% over the initial rate
100% gift allowed with a 5% down payment
Democracy FCU will help you organize all of the necessary paperwork that you need to apply for your mortgage. We’ll help you sort through the mortgage terminology so you understand every step in the process. Once you have found your dream home, we will help you decide what mortgage best suits your needs, by comparing rates and features.
Democracy FCU’s First Time Home Buying Program offers several mortgage types. Choose from:
For homeowners who are 62 years or older, let your home start working for you! With a Reverse Mortgage, homeowners can convert part of the equity in your home to cash with no restriction on how you use the funds. The borrower retains title/ownership of the home and the lender will never own the home.
Reverse Mortgages allow the homeowner with limited income to use the accumulated equity in their home to cover monthly living expenses, medical bills, etc. The borrower is not required to pay back the loan until the home is either sold or vacated. As long as the borrower occupies the home, they are not obligated to make monthly payments towards the loan balance. The borrower must remain current on property taxes, homeowners insurance, homeowner association dues, etc.
If you’re tired of refinancing your mortgage to keep up with lower rates the HarmonyLoan is right for you. The HarmonyLoan™ is a unique mortgage loan offered by Democracy FCU through our mortgage partner Credit Union Mortgage Association.
With a HarmonyLoan™ when interest rates fall, you manage your own rate-reset online. A simple "click" locks in your new interest rate. You may be eligible to request a reset of your rate or the fixed rate period of your loan every 120 days.
The HarmonyLoan™ program resets your interest rate with No Points and No Closing Costs. It’s fast, easy and affordable.
When you refinance a traditional mortgage loan, the rate is based on your current financial situation. Changes in your situation—such as a job loss, salary reduction or significant purchase—can impact your ability to qualify for a refinance. With the HarmonyLoan™ as long as you pay on time, you can lower your rate instantly.
To find out more details about the HarmonyLoan™ call 703.647.7066.
Looking to purchase a new home? Or are you selling a home? Our HOME Advantage Program helps save you time and money.
We'll help you find your next home and a real estate agent who pays Cash Rewards at closing.
Mortgage and Consumer Loan Officer Jules King has extensive knowledge and over the last 17 years has become very passionate about helping people achieve their home-ownership dreams. He will be there for you every step of the way to make sure you feel confident and informed, whether you are buying, refinancing or building. Jules is ready to help you understand your unique needs, discuss your options and help you make the most of your money!