With Inflation High and Rates Rising, LAFCU Introduces New Adjustable Rate Mortgage

 LANSING, Mich. — As inflation remains high and the Fed continues to push up rates, Lansing Area FCU (LAFCU) has introduced a 10/6 adjustable-rate mortgage (ARM).

In announcing the new offering, the $970-million credit union noted ARMs were a hallmark of the 1980s inflationary period and the mid-2000s mortgage crisis, and the product is now making a “comeback.”

The loan has a fixed rate of interest for the first 10 years of the loan, after which it adjusts once every six months over the remaining 20 years. The terms apply to both new and refinanced mortgages.

The Stanton familiy in their new home.

“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,” said Rob Boomershine, LAFCU vice president of lending. “It was developed to help our members in this period of inflation and rising interest rates.” 

LAFCU said its 10/6 ARM loan is typically priced up to two percentage points less than a 30-year fixed loan. 

One Family’s Experience

The credit union shared the story of members Amber and David Stanton, who 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.” 

LAFCU added that it also has a program in which it assists physicians in obtaining mortgages under which student loan balances do not negatively impact the member’s debt-to-income ratio.