You can use an LGFCU Adjustable Rate Mortgage (ARM) to purchase or refinance a primary home and buy a first home, vacation home or rental property. It’s an affordable choice with cost-saving features like competitive rates and no private mortgage insurance (PMI) required. All with a financial partner you trust!
How does an ARM loan work?
With our adjustable rate mortgage, the loan rate is subject to change every five years. The maximum interest rate adjustment is 2% every five years or 6% over the life of the loan.
Any property you buy or refinance must be located in North Carolina, South Carolina, Virginia, Georgia or Tennessee. For mortgages on primary residences, you must reside in North Carolina or bordering states to be eligible.
Budgeting for home expenses made easy
We make your life easier by building your home expenses into your monthly mortgage payment. Your estimated annual property tax and homeowners insurance premium payments are added to your principal and interest payment, then placed in an escrow account every month. This account earns dividends equal to the Share Account rate. When it’s time to pay those bills, the Credit Union sends those payments on your behalf.
Fees and other settlement costs
There are no application or credit report fees, but other costs may arise during the mortgage loan process. At the time of application, your Credit Union loan officer will provide a loan estimate of all settlement costs such as appraisal fee, origination fee, attorney fees, recording fees, title insurance costs, and survey and pest inspection costs, if required. The origination fee is 1.00% of the loan amount with a cap of $2,500.
Special programs
For first-time homebuyers applying for an ARM Loan, special programs are available to further reduce the costs of homeownership.
The Federal Home Loan Bank of Atlanta (FHLBA) First-time Homebuyer Program offers down payment assistance for people buying a home for the first time, or those who haven’t owned a home in the last three years.
How this program works:
- Funds up to $12,500 are available to help with down payment and closing costs.
- Applicant must contribute a minimum of $1,000 of personal funds toward the down payment and closing costs.
- Total household income must not exceed 80% of the median income for the county in which the home is being purchased.
- FHLBA funds are only available to first-time homebuyers approved for an ARM Loan.
- Recipients of FHLBA funds who live in the home for at least five years won't have to repay the funds.
- Funds are available on a first-come, first-served basis.
To see if you qualify for FHLBA funds, simply enter your county, household size and household income into the FHLBA Income Limits Calculator. Select the most recent HUD year in the calculator's drop-down menu.
Another money-saving option is the Mortgage Credit Certificate offered through the North Carolina Housing Finance Agency. This certificate works best with members buying a first home because it reduces the tax liability on a home purchase.
Compare: ARM Loan or First-Time Homebuyers Loan
If you’re trying to decide whether to apply for an ARM Loan or our First-Time Homebuyers Loan, use the table below to compare the special programs available for each. It’s also a good idea to consult your tax advisor for additional guidance.
Loan applicants must meet mortgage program eligibility requirements to take advantage of these closing costs and down payment assistance benefits.
Mortgage Credit Certificate
Federal income tax credit for 30% of the mortgage interest payment each year up to a maximum benefit of $2,000 per year.
Federal income tax credit for 30% of the mortgage interest payment each year up to a maximum benefit of $2,000 per year.
Financing to fit your needs
The maximum mortgage loan amount depends on the loan's purpose, the type of loan and the occupancy status. For purchases, maximum financing and loan-to-value tier are determined based on the property's sales price or its appraised value, whichever is less.
Loan-to-value ratio (LTV) is the portion of the appraised value of the property that is not covered by your down payment. Cash-out is defined as any funds that exceed the balance owed on the first or second mortgages being paid off.
- For single-family primary residences, financing of 90.1% to 100% is available for purchases and no cash-out refinances. For a two-unit primary residence, the maximum LTV for purchases and no cash-out refinance is 85%, and 80% for a three- to four unit property.
- Financing up to 90% is available for cash-out refinances of a one-unit primary residence, and up to 75% for a two- to four-unit dwelling. For second homes, financing for purchases and non-cash refinances is available up to 90%, and up to 75% for cash-out refinances. The maximum loan term for second home loans is 15 years.
- Up to 85% financing is available for the purchase or no cash-out refinance of a rental property. This is limited to 75% LTV for cash-out refinances for one-unit dwellings and 70% for two- to four-unit dwellings.
Manufactured Homes can typically serve as collateral, but must be the primary residence of the borrower.
Each member may finance up to six properties with the Credit Union, but only one may be financed at greater than 90% loan-to-value.
Your resources: Loan Information Checklist and Home Loan Toolkit
The FHLBA First-Time Homebuyer Product is available only through our ARM products and cannot be used with the LGFCU First-time Homebuyers Loan. Mortgage loans are subject to approval. Greater than 90% loan-to-value limited to maximum financing of $500,000. Mortgages are available for properties located in NC, SC, GA, TN or VA. For mortgages on primary residences, members must reside in NC or bordering states to be eligible.
Mortgage loans are subject to approval. Greater than 90% loan-to-value limited to maximum financing of $500,000. Mortgages are available for properties located in NC, SC, GA, TN or VA. For mortgages on primary residences, members must reside in NC or bordering states to be eligible.
