Designed specifically for first-time home buyers, it allows borrowers to put only 10% cash down for their first home without the burden of a PMI⁴ (private mortgage insurance) requirement. Additionally, first-time buyers receive a discount on closing costs.
This affordable and unique program gives first-time buyers the flexibility they need depending on their situation—borrowers can pick from ANY of our mortgage products and terms.
Fixed Rate Mortgages
have a rate of interest that is constant for the duration of the loan.
Adjustable Rate Mortgages (ARM) have a fixed period of time during which the initial interest rate stays the same, followed by an adjustment in the interest rate as per a predetermined frequency.
Our Construction to Permanent Mortgage options allow you to pick from any of our traditional Mortgage products and terms.
We offer an interest-only repayment period while your construction is being done for both purchase or refinance situations.
Once you’ve submitted your application, you will have a personal Mortgage Specialist follow up with you to provide additional help and guidance. Your Mortgage Specialist will be your single point of contact from here. He or she will send you an approval letter, order an appraisal from a licensed appraiser familiar with home values in your area, and prepare your loan for closing. The closing will take place at the office of our attorney in your area, who will act as our agent. Before closing, your Mortgage Specialist will contact you to walk through the final information and answer any questions you might have.
HOW DO I APPLY FOR A DIRECT FEDERAL MORTGAGE?
Completing your mortgage application online is just like completing one on paper — with the added benefit of being able to complete it anytime, anywhere. Plus, at any time, you may stop and save your application; then return to it later. Expect your application to take about 15 minutes to complete. A series of prompts and helpful tips will guide you through each screen to help you through each stage of the application process, which includes the following steps:
Start App – You’ll be asked to select a username and password to ensure security and privacy. Create and enter your username and password here and make a note of them for your records.
Loan Details – Enter the address, price and other information related to the property you are purchasing OR REFINANCING .
Personal Info – Provide the name, date of birth and SOCIAL SECURITY number for each borrower.
Employment Income – Tell us about your current employment situation, including gross income and any additional income you may receive.
Expenses – What is your current monthly expense for housing?
Asset Info – Provide a list of your financial assets, including bank accounts and investments, in order to verify that you have access to sufficient funds to complete the transaction.
Submit App – After a few final questions, simply submit the APPLICATION to Direct Federal and a MORTGAGE SPECIALIST will follow up with you
And that’s it! If you could like to get started right away, you may apply now.
WHAT IF I HAVE MORE QUESTIONS ALONG THE WAY?
If you don’t find the information you’re looking for on our website, feel free to call us at 781.433.2929, or stop in and see us.
Payments shown to not include taxes or insurance. Your payment may be greater.
¹ Single Family up to $726,200, 2 Unit up to $929,850, 3 Unit up to $1,123,900, 4 Unit up to $1,396,800. Call for our increased loan limits in designated High Cost Areas.
² Annual Percentage Rate (APR). The interest rate and APR are subject to change. Your actual rate will depend on various factors including, but not limited to, loan type, credit profile, property type, appraised value, occupancy, subordinate financing and loan size. Mortgage loans cannot exceed $2,000,000.00. Assumes 20% down and 0 points. Subject to credit approval.
³ Adjustable rate programs are based on a 30 year term. Our adjustable rate mortgages offer an initial rate that is fixed for either a 5 year or 7 year period. After that period, and every year thereafter, the interest rate can adjust based on current market condition. Each adjustment has a 2% change cap and a 5% lifetime change cap.
⁴ First Time Home Buyer (FTHB) Program. Additional product options available. Call for details.
Equal Housing Lender. Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.
Fixed-rate mortgages carry the same interest rate and monthly payment over the life of the loan. This stability makes fixed-rate mortgages a popular choice for many home buyers.
In today's low-rate environment, experts advise using a fixed-rate mortgage if you can. Though a fixed-rate mortgage may have a slightly higher rate than an ARM, the lack of surprise is appealing.
Market interest rates have been near all-time lows, says Mike Schenk, vice president, economics and statistics, at the Credit Union National Association (CUNA). They've recently increased and many believe they will be on a generally increasing path over long term. For that reason, borrowers who can afford a fixed mortgage should probably choose that option.
ADJUSTABLE RATE (ARM)
Generally, with an ARM you'll get a lower beginning rate, but it can rise or fall at specified intervals. This initial rate stays the same for a specific time frame but, when the introductory period ends, rates will change and the amount of a monthly mortgage payment can increase—sometimes substantially.
An ARM's interest rate is tied to a public financial index, such as a U.S. Treasury note. These loans come with two caps—one to limit how much the rate can climb at each adjustment, and another to limit the increase over the life of the mortgage. ARMs are listed as 1/1, 3/1, 5/1, and so on. The first number shows how many years the initial fixed rate will last. The second number indicates how often the interest rate will be adjusted after that. The "1" in these examples indicates an annual adjustment.
ARMs generally have caps on how much the interest rate can rise or fall. A common adjustable-rate mortgage is a 5/1 ARM with a 2/6 cap. This means the rate is fixed for the first five years and the interest rate and payment is reset every year after that period. The second set of numbers indicates the maximum increase in any year is limited to 2% and the maximum increase over the life of the loan is 6%.
So say you borrow $200,000 for a loan at an initial interest rate of 3%. Your monthly mortgage payment for the first five years of the loan will be $843. If the interest rate increases the sixth year of the loan by two percentage points, your payment will be $1,039. If the rate increases by two more percentage points in year seven and then again in year eight, your payment would end up being $1,471. You'd be paying $628.25 more for your monthly mortgage than when you originally took out the loan.
CONSIDER YOUR TIMETABLE
If you know you're going to move in a few years, the lower-rate ARM could save you money. Most of the time, however, the overall rate environment drives buyers' decisions.
In a high-rate environment, some consumers can afford to buy only if they qualify for a lower-rate ARM. They bet on rates dropping in a few years, when they hope to refinance with a fixed-rate mortgage. In a low-rate environment, buyers feel inclined to lock in that low rate while they can get it.
Talk with a credit union lender about your home loan options. If you're considering an ARM, be sure to find out how much your interest rate and monthly payments can increase with each adjustment. Learn how soon and how often your payment could go up.
Next, ask if there is a cap on how high your interest rate can go, and if there's a limit on how low your interest rate could go. Will you still be able to afford the loan if the rate and payment go up to the maximums allowed? Don't automatically assume you'll be able to sell the house or to refinance your loan before the rate changes.
"Understanding the terms and likely payment schedules is critically important for consumers," Schenk says. "As member-owned, democratically controlled financial institutions, credit unions do—and always have—cared deeply about ensuring members choose appropriate and affordable mortgages."
The number of years over which you will repay the mortgage loan.
An annual fixed interest rate for the mortgage. An interest rate is different from the Annual Percentage Rate (APR), which includes other expenses such as mortgage insurance, which were paid when the mortgage was first originated.
Monthly principal and interest payments, and taxes and insurance if applicable.