ARM stands for Adjustable Rate Mortgage, which is a type of home loan where the interest rate fluctuates over time based on the market conditions. The interest rate for an ARM loan is typically fixed for an initial period of time, and then it will adjust periodically, based on a predetermined index such as the prime rate or LIBOR.
ARM loans can be attractive to borrowers who expect their income to increase in the future, as they can take advantage of the lower initial interest rate and potentially save money in the short term.
It's important to carefully consider the pros and cons of an ARM loan before deciding if it's the right choice for you. You should also make sure you understand the terms of the loan, including the initial rate, the frequency and amount of rate adjustments, and any caps on how much the rate can increase or decrease.
- *Available to all borrowers on a conventional 5/5 ARM loan product with GENCO Federal Credit Union.
- Eligible on single family residence, primary occupancy only.
- The amortization for this product is 30 years (360 monthly loan payments).
- Initial rate to be priced at the current 15-year fixed rate including all loan level pricing adjustments for the first 5 years.
- After the first 5 years of amortization, the loan will adjust (beginning at the 61st payment month), using a 5-year Constant Maturity Treasury (CMT) Bill index plus 2.5% margin, not to exceed 2 percentage points.
- The loan will readjust every 5 years (or 60 months) of amortization using a 5-year Constant Maturity
Treasury (CMT) Bill index plus 2.5% margin, not to exceed 2 percentage points at each subsequent 5-year adjustment, and not to exceed an increase of 5 percentage points above the initial interest rate over the life of the loan.
- AII lending products are subject to credit and property approval. Terms, conditions, and interest rates are subject to change without notice. Certain restrictions may apply and vary based on borrower qualification and collateral conditions.
- Refinancing an existing mortgage loan may cause the total finance charges to be higher over the life of the loan. This is not a commitment to lend.
- This product may not be combined with any other promotion or discount points.
- Additional restrictions may apply. GENCO Federal Credit Union: 731 N. Valley Mills Drive, Waco, TX 76710; Phone: (254) 776-9550; NMLS ID #631166.