Adjustable-Rate Mortgage (ARM) Loans
Flexibility for Your Future
Mortgages Tailored to Your Needs
Get a home loan to suit your goals with a low, fixed initial rate and a lower payment at the start of your loan term.
AN ADJUSTABLE-RATE MORTGAGE LOAN OFFERS THESE BENEFITS:
 Low Initial Rate | Choice of Terms |
3% Down Payment | Trusted Local Team |
Features of an Adjustable-Rate Mortgage (ARM) Home Loan
An adjustable-rate mortgage lets you finetune your loan to suit your financial situation and goals.
- Get a lower initial rate and payment than a fixed-rate loan
- Choose how long you want your rate to be fixed and how often you want it to adjust
- A cap structure means your rate can only increase so much each adjustment period
- Down payment as little as 3%
- No upfront mortgage premiums
- No Private mortgage insurance (PMI) for in-house mortgages
An ARM is a great choice if you plan to refinance or sell your home in the short term.
Our ARM Application Process is Easy!
1. | Apply OnlineUse our secure online application portal to fill in your personal and financial details. | 2. | Get Pre-qualifiedWe'll review your information. If approved, we'll agree on the best ARM term and rate for you. | 3. | Find Your Home!Once your offer is accepted, we can guide you through the closing process and payments. |
“Outstanding service. My loan officer Mrs. Kayla White really cares for you and your financial growth. I have learned a lot over the three-plus years I have been with her at RRFCU. Thank U so much.” -- Jeanette B.
“I love my credit union because the staff is always friendly, and very knowledgeable. They always assist me in a courteous, and professional manner, but the thing I like most is that they always treat me like a person, and not a number!!!” -- Darius S.
“Working with them on several types of loans has been very easy and always painless. Didn't even have to go into the [branch] for this last loan. Thanks for being pleasant and helpful!!” -- Lyndie M.
ARM Home Loan FAQs
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Who is an adjustable-rate mortgage (ARM) loan good for?
An ARM is a useful financial tool that lets you buy a home with a low, fixed interest rate for the initial years of your loan term, so your monthly payment is lower at the beginning, too. In fact, the initial rate for an ARM is usually lower than the rate for a fixed-rate mortgage!
An ARM could be a good choice if:
- You think your income will rise in the future and you want a lower payment right now.
- You plan to refinance your home in the short term and possibly switch to a fixed-rate mortgage.
- You plan to sell your home within a few years.
- You think market rates will go down in future.
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How does an adjustable-rate mortgage (ARM) work?
The figures on a rates table might make an ARM look a bit complicated, but it's simple once you understand what they mean. Here's how an ARM works:
- You decide how many years you want your initial interest rate to be fixed.
- You agree to an initial fixed rate, which is based on your initial period.
- You decide how often you want your rate to adjust after the initial period is finished.
- You begin paying your mortgage with a low, set payment.
- Once your initial period is over, your rate and payment will start adjusting with market rates.
- Your rate may go higher or lower than the fixed-rate mortgage rates.
- There's a limit on how much your rate can rise at any adjustment period, and a limit on how much it can rise in total over the life of the loan.
- These limits are known as the cap structure of your ARM.
For example: A 5/1 ARM means you get a low, fixed rate for the initial five years of your loan then your rate adjusts once every year after that. A 2/1/5 cap structure means your rate can increase up to 2% at the first adjustment then up to 1% for every adjustment after that, for a total of 5% over the entire loan term.
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What term should I choose for my fixed-rate loan?
An ARM loan and a fixed-rate mortgage loan are the two most common options when you get a conventional home loan from a private lender, like your local credit union. With a conventional mortgage, you usually need to pay private mortgage insurance (PMI) if your down payment is under 20%.
In contrast to conventional home loans, Veterans Affairs (VA) loans are partly insured by the federal government to make homeownership more accessible for certain groups. ARMs may or may not be available for these loans.
VA loans may need a lower down payment (or no down payment) and may accept lower credit scores and income levels than conventional home loans. They don't need PMI but they do come with other fees.
The appraisal guidelines for VA loans are stricter than for conventional loans, and you need to meet certain criteria to apply. You must be a qualified veteran, reservist, active-duty service member or qualifying military spouse to get a VA loan.
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What interest rate will I get for my ARM loan?
The annual percentage rate (APR) you get will depend on your credit score and the ARM term.
- Higher credit scores get lower interest rates
- ARMs with shorter initial periods get lower rates than longer initial periods.
Keep in mind that an adjustable-rate mortgage (ARM) usually has a lower initial rate than a fixed-rate mortgage, but your rate may go higher or lower than a fixed-rate mortgage once it starts adjusting.
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What term should I choose for my ARM?
The term you choose has a big impact on your mortgage loan payment. If an ARM sounds like the best option for you and your family, it's a good idea to talk to one of our trusted mortgage loan originators to see which term is the best fit for your goals and budget.
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What kind of property can I buy with an ARM loan?
You can use a Red River Credit Union adjustable-rate mortgage to finance a range of property types, including:
- 1-4 Family Residence
- Land Only
- Investment Property
- Second Homes
- Double Wide Mobile Homes (Permanently attached to the property)
- Non-Conforming Property
- New Construction Property
- Home Equity Loans
- Home Improvement Loans
Other Home Loan Options and Calculators
Fixed-Rate Mortgages
A fixed rate means your monthly payment stays the same through the life of your loan and you never need to worry about what's happening in the markets.
VA Loans
Backed by the VA, military personnel who qualify for this loan can get affordable rates with no down payment, and closing costs are often included in the purchase price.
Mortgage Calculators
Use our handy calculators to see what purchase price and mortgage payment works best for you and your family, whichever type of home loan you choose.