Adjustable Rate Mortgage (ARM) Loans

Meet Our PDCU Mortgage Specialist

Michelle Dzon is authorized to act as an agent on behalf of People Driven Credit Union. Contact her for personalized assistance with your mortgage needs.

Michelle Dzon

Member First Mortgage

michelle.dzon@memberfirstmortgage.com

616-301-1714 | NMLS ID: #401292

Yes, many borrowers choose to refinance their ARM to a fixed-rate mortgage before the adjustable period begins to lock in a stable interest rate and predictable monthly payments.

 

Refinance

Consider your financial situation, how long you plan to stay in the home, and your risk tolerance for potential interest rate changes. ARMs can be a good choice if you plan to sell or refinance before the adjustable period begins or expect interest rates to remain stable or decline.

Some ARMs may have prepayment penalties, but People Driven Credit Union does not. You can refinance or pay off your Adjustable Rate Mortgage with PDCU early without any prepayment penalties.

Yes, ARMs often have caps that limit how much the interest rate can increase at each adjustment period and over the life of the loan. These caps provide some protection against large payment increases.

ARM interest rates adjust based on a specific index (such as the Treasury index) plus a margin set by the lender. When the index rate changes, the interest rate on your loan adjusts accordingly.

The main risk with an ARM loan is that your monthly payments can increase if interest rates rise. Understanding the potential for payment changes is important to ensure that you can afford higher payments if the rate adjusts upward.

ARMs typically offer lower initial interest rates compared to fixed-rate mortgages, which can lead to lower initial monthly payments. This can be beneficial if you plan to sell or refinance before the adjustable period begins.

The initial period is when the interest rate on an ARM is fixed. After this period, the rate adjusts at regular intervals. For example, a 7/1 ARM has a fixed rate for the first seven years and then adjusts once every 12 months.

ARMs are often described with two numbers, such as 5/5, 7/1, or 10/1. The first number indicates the initial fixed-rate period (in years), and the second number indicates how often the rate will adjust after the initial period (in years).

Unlike a fixed-rate mortgage, where the interest rate remains constant throughout the loan term, an Adjustable Rate Mortgage has an interest rate that adjusts periodically. This means your monthly payments can increase or decrease over time based on changes in the interest rate.

The NMLS ID# (Nationwide Multistate Licensing System & Registry Identification Number) is a unique identifier assigned to mortgage loan originators (MLOs) and institutions involved in mortgage lending. It was created by the federal government to increase transparency and accountability in the mortgage industry. Why the NMLS ID Matters The NMLS database tracks licensing status, employment history, and any regulatory actions. This helps protect consumers by making sure only properly licensed professionals handle your mortgage. You can verify any loan officer or lender instantly. Where You Will See the NMLS ID Mortgage professionals must display their NMLS ID on all advertising, loan documents, emails, and websites. At People Driven Credit Union, every mortgage team member proudly shows their NMLS ID so you always know who you are working with. It is a unique identifier assigned to mortgage loan originators and institutions. You can verify any MLO or company at the official NMLS Consumer Access website. Get Help from Our Team Call us at 844-700-7328 during business hours. Our team explains what an NMLS ID is and shares the NMLS ID for any loan officer working on your file. You can also visit any branch in Livonia, Southfield, Warren, Ypsilanti, or Romeo. 5 Helpful Hints About NMLS IDs

1. First, always look for the NMLS ID on any mortgage advertisement or document.
2. Next, verify the ID at the official NMLS Consumer Access website.
3. Also, ask your loan officer for their personal NMLS ID number.
4. Then, check the company’s NMLS ID for People Driven Credit Union.
5. Finally, contact us at 248-263-4100 to confirm any NMLS ID on your loan file.

People Driven Credit Union uses the NMLS system to ensure complete transparency and consumer protection in every mortgage transaction. You can trust that every team member helping you is properly licensed and registered. Many members appreciate the peace of mind that comes from knowing exactly who is handling their home loan.

To apply for a mortgage, you will need to provide the following documents to verify your identity, income, assets, and employment. Required Documents & Why They are Needed

• Copy of your driver’s license or state-issued ID – Verifies your identity and legal name.
• Last 2 years of W-2 forms – Prove your employment history and income stability.
• Most recent 30 days of pay stubs – Shows your current income and allows us to calculate your debt-to-income ratio accurately.
• Last 2 years of Federal Tax Returns (including all schedules) – Confirms your reported income and helps lenders assess your overall financial picture.
• Most recent two months of bank statements (all pages) – Verifies your assets, down payment funds, and that you have enough reserves after closing.
• Contact information for your homeowner’s insurance agent – Required to set up the proper insurance coverage for the property at closing.

Why These Documents Matter Lenders use these documents to confirm you can afford the loan and meet underwriting guidelines. Having them ready when you apply can shorten your approval time from weeks to days. 5 Helpful Hints When Preparing Mortgage Documents

1. Gather everything before you apply — it can save you weeks of delays.
2. Make sure all pages of the bank statements are included.
3. Include all W-2s and tax returns, even if you filed jointly.
4. Scan or take clear photos of your documents for easy upload.

To check the status of your loan application, contact People Driven Credit Union at 248-263-4100 during business hours or reach out to your assigned loan specialist if you have their contact information. Be ready to verify your identity and share details such as your name, member number, or application number so we can review your application with you.

When you check your status, it is also a good idea to ask whether any additional documents or information are needed to keep your application moving. Review times can vary based on the loan type and the information required, so contacting us directly is the best way to get the most current update on your application.