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A Better Way to Buy

Adjustable-Rate Mortgages (ARMs)

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An affordable way to buy now — without waiting on rates.

 

Get into a home now instead of waiting for rates to drop.

 

Buy the home you want — without settling because of cost.

 

Choose an initial fixed-rate period of five, seven or 10 years, variable thereafter.

 

Lower initial fixed rate makes monthly payments more manageable.

 

If rates drop, apply to refinance into a fixed-rate loan.

 

Build equity instead of paying rent with no return.

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What is an ARM?

An adjustable-rate mortgage (ARM) offers a lower initial fixed rate compared to a traditional fixed-rate mortgage. This means lower monthly payments at the start, helping you afford more home or save money upfront. For example, a 5/1 ARM would be fixed for the first five years, then adjusts up or down once a year. An ARM could be a good option if you:

  • Plan to sell or refinance within a few years.
  • Expect your income to increase in the coming years.
  • Want to take advantage of its lower variable interest rate offering initial savings.

After the initial period ends, the rate adjusts based on market conditions. But don't worry — we’ll help you understand your options so you can plan ahead with confidence.

5/1 ARM as low as

6.48 % APR
CURRENT MORTGAGE RATES
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Is an ARM Right for You?

If you’ve heard ARMs are risky, unpredictable or only for short-term buyers, you’re not alone. There are plenty of myths out there that might be holding you back from considering one. But here’s the truth: ARMs can offer more flexibility, lower initial payments and even the potential for your rate to decrease over time based on market conditions. Let’s take a closer look at some of the biggest misconceptions and what they really mean for you. You might be surprised!

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ARM FAQs

ARMs use terminology you may not be familiar with. Here are five of the most common terms with simple explanations.

This is how often your interest rate can change after the fixed-rate period ends. If you have a 5/1 ARM, the adjustment period is one year — meaning after the initial fixed period (five years), the interest rate can change once per year.

Think of the index as the "base" cost of borrowing money, set by the financial market where banks and institutions lend to each other. The index rate is influenced by factors like Federal Reserve policies, inflation and overall economic conditions. When the index moves up or down, your ARM interest rate adjusts accordingly.

This is the extra percentage a lender adds to the index to set your actual interest rate. If the index is 3% and your margin is 2.5%, your rate would be 5.5%.

These numbers tell you how much your rate can increase. Usually written as 2/2/5 (or something similar), they mean: 2% max increase the first time your rate adjusts; 2% max increase per year after that; 5% total max increase over the life of the loan.

This is what your actual rate will be when the fixed period ends. It's calculated by adding the Index + Margin (your lender's set percentage).

We'll help you compare your options — even if we're not one of them.

If you've already researched loans and are happy with your options, we can help you compare them, so you know you're making a confident choice. Even if it's not with us.

 
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Protect Your Biggest Investment

  • Homeowners Insurance: Make sure you're protected from losses due to fire, lightning, burglary, vandalism, storms and more.
  • Condominium Insurance: Get coverage for interior walls and floors, personal property and personal injury.
  • Earthquake Insurance: This separate policy helps you recover, replace and rebuild if a tremor damages your home.
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Saturday, 9 a.m. – 3 p.m.

(800) 462-8328, EXT. 8288
Disclosures

APR = Annual Percentage Rate. All loans subject to approval.

​The interest rates and APRs listed above are effective as of 05/20/2025 and are subject to change without notice. The pricing you may qualify for is based on factors including your credit rating and loan-to-value (LTV) of your property. Loan pricing that you may qualify for can be different based on your credit history, loan-to-value (LTV), occupancy, property type, loan amount, loan purpose and income/financial obligations. A minimum credit qualifying score is required. Rates and programs are subject to change without notice. Adjustable-rate home loans; rate and payment subject to change after loan consummation. Lending area: State of California.
 

NMLS Identifier: 405503

CA Insurance License 0I19344. Purchasing an insurance product from SchoolsFirst Insurance Services is not required to originate a loan with SchoolsFirst FCU.