If you've ever asked yourself if there was an option to get a lower rate or a way to get a lower payment when looking at purchasing a home in the current market conditions, you are not alone. LOC and our Adjustable Rate Mortgages are here to help!


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What is an Adjustable Rate Mortgage?

An Adjustable-Rate Mortgage (ARM), is a type of home loan with an introductory interest rate that will last for a select period before adjusting at intervals for the remainder of the loan.

With an LOC Credit Union ARM, you'll have the option to pick a lower rate for an initial term of either 5 or 7 years.


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Adjustable Rate Mortgages:

  • Provide more flexibility to qualify a buyer to be approved

  • For borrowers with a credit score under 780 and under, the impact to your rate is less than it would be if you were doing a fixed-term mortgage

  • Are initially priced lower than 30-year fixed

  • Offer cash out refinance options available up to 90% (PMI required if over 80% LTV)

  • Can help a borrower pay down principle faster or better manage cash flow

  • Excess cash can be used to pay down other debt or towards retirement contributions


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What makes our ARMs unique?

  • Lower caps on rate changes
  • Most lenders have a 6% life cap on the rate change compared to LOC at 5%
  • Frequency of rate changes
  • Most lender ARMs have an adjustment period on rate of every 6 months after the first adjustment. LOC is a minimum of 1 year or an option of less changes with product offerings with rates adjusting every 3 or 5 years
  • Fixed Rate Conversion feature
  • Assumable feature

Features and Benefits of Adjustable Rate Mortgages

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Lower Rates

Offers a rate that can be up to 1.50% less than a conventional 30-year fixed mortgage.

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Future Savings

Borrowers can obtain substantial saving on refinance costs if rates drop down and you want to move to a fixed rate loan.

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Financial Flexibility

Great option when selling a property to a family member. 

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Increase Your Purchase Power

Provide more flexibility for a qualified buyer to be approved.

Let Our Real Estate Lending Experts Go to Work For You!

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Bill Cook
NMLS: #174319

Vice President, Real Estate Lending

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Schedule an Appointment

Our Real Estate Lending team is standing by with a no obligation consultation, ready to answer any questions you may have about the home buying process.

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Debby Priskorn
NMLS: #504365

Real Estate Lending Consultant

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Adjustable Rate Mortgage FAQs

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Membership is open to anyone who lives, works, worships, or attends school in the state of Michigan.

A current or eligible member's immediate family (spouse, sibling, child, grandchild, parent, grandparent) or an individual living in the same household of a current or eligible member can also join LOC.

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