LANSING, Mich. — As inflation grows, the adjustable-rate mortgage (ARM) that was a hallmark of the 1980s inflationary period and the mid-2000s mortgage crisis is making a comeback with LAFCU offering a new 10/6 ARM.
“LAFCU’s 10/6 ARM loan is a low-cost option that allows members to purchase more house for less out-of-pocket monthly expense,” Rob Boomershine, LAFCU vice president of lending. “It was developed to help our members in this period of inflation and rising interest rates.”
The Stantons, of St. Johns, were one of the first families to take advantage of LAFCU’s newly introduced 10/6 ARM loan, which is typically priced up to 2 percentage points less than a 30-year fixed loan.
With a 10/6 ARM, the loan has a fixed rate of interest for the first 10 years of the loan. After that, the interest rate will adjust once every 6 months over the remaining 20 years. These terms apply to both new and refinanced mortgages.
Amber and David Stanton had been living in a 900-square-foot mobile home for four years with their five children while trying to get approved for a mortgage.
“We had been trying to work with another lender but had never met their requirements,” said Amber Stanton. “After working with a loan officer at LAFCU, we were pre-approved and able to pursue our dream of owning our own house.
“The 10/6 ARM saved us $200 a month on our mortgage. Knowing the monthly payments will be stable for 10 years made us much more comfortable with buying a house.”
Boomershine also noted that LAFCU helps physicians obtain mortgages in which student loan balances do not negatively impact the member’s debt-to-income ratio. This allows members to qualify more easily for a mortgage or for a mortgage of a higher amount.
Membership in LAFCU is open to any individual who lives, works, worships, or attends school in Michigan, as well as to businesses in Michigan.