Adjustable-rate mortgages are built for flexibility

The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requires credit union mortgage loan originators and their employing institutions, as well as employees who act as mortgage loan originators, to register with the Nationwide Mortgage Licensing System & Registry (NMLS), obtain a unique identifier, and maintain their registration following the requirements of the SAFE Act. 

University Credit Union's registration is NMLS #409731, and our individual originators' names and registrations are as follows: 

• Merisa Gates - NMLS ID #188870 
• Estela Nagahashi - NMLS ID #1699957 
• Miguel Olivares - NMLS ID #2068660 
• Michelle Pacheco - NMLS ID #662822 
• Britini Pender - NMLS ID #694308 
• Sheri Sicka - NMLS ID #809498 
• Elizabeth Torres - NMLS ID #1757889 
• David L. Tuyo II - NMLS ID #1152000 

Under the SAFE Act, consumers can access information regarding mortgage loan originators at no charge via www.nmlsconsumeraccess.org.

Requests for information related to or resolution of an error or errors in connection with an existing mortgage loan must be made in writing via the U.S. mail to:

University Credit Union/TruHome
Member Service Department
9601 Legler Rd.
Lenexa, KS 66219

Mortgage payments may be sent via U.S. mail to: 

University Credit Union/TruHome 
PO Box 219958 
Kansas City, MO 64121-9958 

Contact TruHome by phone during business hours at: 

855.699.5946 
5 am - 6 pm PST Monday-Friday, 6 am - 11 am PST Saturday 

An adjustable-rate mortgage (ARM), also called a variable-rate mortgage or hybrid ARM, is a home loan with an interest rate that adjusts over time based on the market. ARMs typically have a lower initial interest rate than fixed-rate mortgages, so an ARM is a money-saving option if you want the typically lowest possible mortgage rate from the start. Learn more

An ARM is a great option for short-term homebuyers, buyers expecting income growth, investors, those who can manage risk, first-time homebuyers, or people with a strong financial cushion. Because you will receive a lower initial rate for the fixed period, an ARM is ideal if you’re planning to sell before that period is up. 

• Short-term Homebuyers: ARMs offer lower initial costs, ideal for those planning to sell or refinance quickly.
• Buyers Expecting Income Growth: ARMs can be advantageous if income rises significantly, offsetting potential rate increases.
• Investors: ARMs can potentially increase rental income or property appreciation due to lower initial costs.
• Risk-Tolerant Borrowers: ARMs offer the potential for significant savings if interest rates remain low or decline.
• First-Time Homebuyers: ARMs can make homeownership more accessible by lowering the initial financial hurdle.
• Financially Secure Borrowers: A strong financial cushion helps mitigate the risk of potential payment increases.

To qualify for an ARM, you’ll typically need the following:
 

• A good credit score (the exact score varies by lender).
• Proof of income to demonstrate you can manage monthly payments, even if the rate adjusts.
• A reasonable debt-to-income (DTI) ratio to show your ability to handle existing and new debt.
• A down payment (often at least 5-10%, depending on the loan terms).
• Documentation like tax returns, pay stubs, and banking statements.

Qualifying for an ARM can sometimes be easier than a fixed-rate mortgage because lower initial interest rates mean lower initial monthly payments, making your debt-to-income ratio more favorable. Also, there can be more flexible criteria for qualification due to the lower introductory rate. However, lenders may want to ensure you can still afford payments if rates increase, so good credit and stable income are key.
 

An ARM often comes with a lower initial interest rate than that of a comparable fixed-rate mortgage, giving you lower monthly payments — at least for the loan’s fixed-rate period.

The numbers in an ARM structure refer to the initial fixed-rate period and the adjustment period.   

First number: Represents the number of years during which the interest rate remains fixed.   

• Example: In a 7/1 ARM, the interest rate is fixed for the first seven years.   

Second number: Represents the frequency at which the interest rate can adjust after the initial fixed-rate period.   

• Example: In a 7/1 ARM, the interest rate can adjust annually (once every year) after the seven-year fixed period.   

In simpler terms:

• 7/1 ARM: Fixed rate for 7 years, then adjusts annually.   
• 5/1 ARM: Fixed rate for 5 years, then adjusts annually.   

This numbering structure of an ARM helps you understand how long you'll have a stable interest rate and how often it can change afterward.

Applying for an adjustable -rate mortgage at UCU is easy. Our online application portal is designed to walk you through the process and help you submit all the necessary documents. Start your home loan application today. Apply now

Choosing between an ARM and a fixed-rate mortgage depends on your financial goals and plans:
 

Consider an ARM if:

• You plan to sell or refinance before the adjustable period starts.
• You want lower initial payments and can handle potential future rate increases.
• You expect your income to increase in the coming years.
   

Consider a Fixed-Rate Mortgage if:

• You prefer predictable monthly payments for the life of the loan.
• You plan to stay in your home long-term.
• You want protection from interest rate fluctuations.
   

If you're unsure, speak with a UCU specialist who can help you evaluate your options based on your financial situation.

How much home you can afford depends on several factors. Your down payment can vary from 0% to 20% or more, and your debt-to-income ratio will affect your approved mortgage amount. Calculate your costs and increase your homebuying knowledge with our helpful tips and tools. Learn more

After the initial fixed period is over, your rate may adjust to the market. If prevailing market interest rates have gone down at the time your ARM resets, your monthly payment will also fall, or vice versa. If your rate does go up, there is always an opportunity to refinance. Learn more