ROCKVILLE, Md. (9/12/12)--The National Institutes of Health FCU (NIHFCU) in Rockville, Md., began offering short-term mortgages three months ago, and the product offerings thus far have been a success.
In that time, the $562.2 million asset credit union has originated roughly 100 five- and seven-year fixed-rate mortgage loans totaling $10 million. They comprise about 20% of the credit union's monthly mortgages (The Washington Post Sept. 7).
Those types of loans currently are extremely popular in the area, Juli Anne Callis, NIHFCU president/CEO, told the Post.
Credit unions and banks are seeing an increase in the number of vacation and second-property purchases, and many are being funded with short-term loans, the newspaper said.
NIHFCU calls that type of financing the "goodbye mortgage," Callis told the paper. Once people pay off their homes and college tuition and expenses, they can afford to purchase and pay off a dream home, Callis added.
The number of overall U.S. mortgages in June was up 23.7% from a year earlier, the Mortgage Bankers Association told the Post. It does not specifically monitor short-term loans.
Although members haven't yet requested five- or seven-year mortgages, Bill White, vice president of residential loans at $1.19 billion asset NASA FCU in Upper Marlboro, Md., told the paper, many members are aggressively paying off their 10- and 15-year loans early because they have a retirement date in mind.
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