Adjustable-Rate Mortgages Sinking Spring, PA

Adjustable rate mortgages (ARMs) can save you money in interest under the right circumstances. At Bellco Federal Credit Union in Sinking Spring, PA, we can help you evaluate home loan options to find the one best-suited to your financial situation.

Bellco FCU is a member-owned, not-for-profit federal credit union. Since 1938, when we were known as the Bell Telephone Credit Union, we have provided unique financial products and services to individuals and small businesses in Berks County. 

We offer membership to people who live, work, worship, or attend school in Berks County, including immediate family members, such as your spouse, children, siblings and parents. Open a primary Member Savings account with as little as $5 and follow a few simple steps to become a member.

As one of the best mortgage lenders in Berks County, PA, Bellco FCU committed to helping your family build a secure financial future.

What is an Adjustable-Rate Mortgage?

An adjustable-rate mortgage features an initial interest rate for a defined term and then fluctuates over the life of the loan. When the interest rate rises or falls, your monthly payment will be adjusted to reflect that change. 

You may see ARMs described in 3/1, 5/1, 7/1, and 10/1 terms. The “1” in the “3/1” ratio, for example, refers to how often the interest rate will adjust. The “3” in the “3/1” ratio represents the length of time during which the loan will remain at the initial interest rate.  So, a 3/1 ARM has a three-year initial fixed-rate period and will then adjust every year after that until the loan is repaid.

The adjustable rate mortgage may be a solid option for your family:

  • An ARM can be easier to qualify for than a conventional fixed-rate mortgage.

  • An ARM can be more affordable because the initial rate is often lower than other mortgage options. 

  • If you’re uncertain about your long-term plans, an adjustable rate mortgage payment may be less expensive than paying rent. 

  • Making monthly ARM payments on time can help you improve your credit so you can refinance at a 30-year fixed interest rate.

Is an ARM Right for You?

If you have the cash to make a 20% down payment, a fixed-rate mortgage is typically a safer, more conservative choice. You will have a good interest rate, you won’t have to worry about an approaching ARM adjustment period, and your mortgage payment will be the same from month-to-month, no matter how long you live in your home.

ARMs are usually best suited to people who know they won't be in their home longer than five to seven years. If you have a stable job and expect your income to stay relatively the same except for some modest raises, an ARM may not make much sense. That's because, at the end of five years, your interest rate is likely to climb, causing your monthly payment to rise dramatically. 

Bellco FCU’s locally-knowledgeable loan advisors will be happy to discuss your goals and help you establish an affordable fixed-rate or adjustable rate mortgage in Sinking Spring, PA that meets the needs of your family.