5 Attractive Mortgages PenFed Offers Washington, D.C., Home Buyers

As of Sept. 29, 2014, the median Washington, D.C., sales price for all property stands at $510,000, according to Trulia.com. While many financial institutions make it challenging—or even impossible—to obtain a mortgage loan for this amount—Pentagon Federal Credit Union (PenFed) is here to help. The credit union offers a wide variety of different mortgage products designed to help members affordably finance their perfect home.

PenFed Mortgage Review: 5 Attractive Mortgage Loan Options

PenFed knows that no two home buyers are the same; that’s why it offers a diverse selection of mortgage options—guaranteeing that its members will find the right home financing solution for their budget.

15/15 Adjustable-Rate Mortgage

If you are only planning on living in your home for less than 15 years, you may want to consider a 15/15 Adjustable Rate Mortgage (ARM).

The benefit to taking out a 15/15 ARM is the advantage of having a lower monthly payment initially, as this program features an interest rate that adjusts only once every 15 years. However, members can rest assured that their rate will increase by no more than 6 percentage points every 15 years.

The 15/15 ARM covers purchases and refinances up to $2 million. As of Sept. 29, 2014, the interest rate is 3.875% with an APR of 3.957%.

For example, at a 3.875% initial interest rate, the APR is 3.957%, subject to increase. Based on current market conditions and a loan amount of $100,000, the monthly payment schedule would be:

  • First 180 payments of approximately $470.24 each at an interest rate of 3.875%; and
  • Next 180 payments of approximately $462.28 each, at an interest rate of 3.625%.

This payment example does not include taxes or insurance; and actual payments may be greater. Rates are effective as of Sept. 29, 2014, for new applications, for a limited time only, and subject to change without notice.

It’s important to note that there is a 1 percent origination fee, and that this rate applies to primary residences and second homes (but not investment properties). Other restrictions may apply.

5/5 Adjustable-Rate Mortgage

The PenFed 5/5 ARM is unique in that it offers a fixed interest rate for the initial five years, and it adjusts only a maximum of 2 percentage points every five years after that—with a lifetime cap of 5 percentage points.

That means a borrower starting at the 2.875% rate can be assured that rate will last five years without unpredictable fluctuations due to market conditions.

For example, at a 2.875% initial interest rate, the APR is 3.536%, subject to increase. Based on current market conditions and a loan amount of $400,000, the monthly payment schedule would be:

  • First 60 payments of approximately $1,659.57 each at an interest rate of 2.875%; and
  • 300 payments of approximately $1,848.41 each, at an interest rate of 3.875%.

This payment example does not include taxes or insurance; and actual payments may be greater. Rates are effective as of Sept. 29, 2014, for new applications, for a limited time only, and subject to change without notice.

Enjoy the advantages of having no origination fee; a free, 90-day rate lock* and optional rate reset protection.

Fixed-Rate Mortgages

PenFed offers a number of fixed-rate mortgage programs to choose from (even for those who need to finance a bigger purchase) for purchases or refinancing. Fixed-rate mortgages provide a level of security that home buyers who plan on living in their purchase long-term seek; the interest rate on these products won’t vary over the life of the loan, meaning monthly principal and interest payments will remain the same for the life of the loan.

Washington, D.C., home buyers, therefore, have access to an impressive deal; mortgage rates have remained near record lows recently, but are likely to rise in the coming few years.

One of several programs available with PenFed is its 30-year, fixed-rate Mortgage; which offers you a low rate and fixed payments for the life of the loan, and is also an affordable way to purchase a second home!

A payment example for a 30-year fixed mortgage for a loan amount of $250,000 at a 3.990% interest rate and a 4.093% APR, based on 0 points, would include the following monthly payment schedule: 359 payments of $1,192.10 and 1 payment for $1,191.16.

Payments shown do not include taxes or insurance escrows; actual payments may be greater. Rates are effective as of Sept. 29, 2014, for new applications, for a limited time only, and subject to change without notice.

High Balance

High Balance mortgage loans are available for up to $625,000 for single-family homes in the District of Columbia. Maximum loan-to-value limits are 85 percent for homes and 80 percent for condominiums. There is a 1 percent origination fee. With two programs from which to choose, you decide what’s right for you.

A payment example for a 30-year High Balance mortgage for a loan amount of $450,000 at a 4.125% interest rate and a 4.220%, APR, based on 0 points, would include the following monthly payment schedule: 359 payments of $2,180.92 and 1 payment of $2,182.29.

Payments shown do not include taxes or insurance escrows; actual payments may be greater. Rates are effective as of Sept. 29, 2014, for new applications, for a limited time only, and subject to change without notice.

VA Fixed

VA loans, which are backed by the Department of Veteran Affairs and offered to members who have served in the Armed Forces, help buyers who are unable to put down a significant, or any, down payment.

PenFed has two VA programs available to its members. One such program is PenFed’s 30-year fixed VA loan.

For this program, lending amounts are available up to $417,000 (and possibly higher) for Washington, D.C., residents. A payment example for a 30-year fixed VA loan for a loan amount of $103,300 at an interest rate of 4.000%, and a 4.320% APR, based on no points, would include the following monthly payment schedule: 359 payments of $493.17 and 1 payment of $493.25.

Payments shown do not include taxes or insurance escrows; actual payments may be greater. Rates are effective as of Sept. 29, 2014, for new applications, for a limited time only, and subject to change without notice.

Enjoy no origination fee and a free, 60-day rate lock*.

PenFed Real Estate Rewards

Save up to $10,000¹ when you use PenFed Real Estate Rewards to buy a home; available on select products only. Certain restrictions and conditions apply.

To see all the mortgage programs available in PenFed mortgage portfolio, view current rates, and see more payment examples, visit PenFed’s mortgage overview .

About PenFed

Member-owned PenFed has been proudly serving members since 1935. The credit union is one of the largest in the nation, with 1.3 million members. It serves as one of the strongest financial institutions in the country, with more than $19 billion in assets. Branches are located in Washington, D.C., Florida, Hawaii, Maryland, New York, North Carolina, Tennessee, Texas, and overseas — with most members also enjoying 24/7 worldwide internet service. To receive any advertised product, you must become a member of PenFed by opening a Share (savings) account. PenFed is federally insured by NCUA and is an equal housing lender. We do business in accordance with the Federal Fair Housing Law and Equal Credit Opportunity Act.

Disclosures:

*Rate Locks: For purchase transactions, the rate cannot be locked until PenFed has received a ratified purchase agreement signed by all parties.

1PenFed Real Estate Rewards: Available when using our preferred title providers, and a network real estate agent. For New York or Texas properties, borrowers are required to pay title insurance premiums and may use any title company to obtain the closing cost credit. Should this loan be paid off within 36 months, the member must repay PenFed a prorated amount of the total closing costs paid by PenFed except those paid to PenFed affiliated title companies. PenFed will pay your closing costs up to $10,000 including but not limited to: appraisal fee, tax service fee, CLO access fee, title fees, transfer tax fees, credit report fee, flood certification fee, recording fee, survey if required and work verification fee. This does not include: origination fee, escrow, interest, homeowner’s insurance or owner’s title insurance, the cost for a structural engineering or similar report, should the appraiser request one, or points to buy a rate down or applied to a loan. See contract addendum for details.

Photo credit: MarkMoz12