The $565-million US Federal Credit Union here said it has generated $6 million in new loan volume from a new mortgage campaign that has promoted short-term, low-fee refinancings.
Called the "Free-in-10 Mortgage," it is designed to allow homeowners to pay principle at an accelerated rate, and own their home free and clear in a decade or less.
The program, designed by US Federal Mortgage Lending Manager Rick Blood, also saves members up to tens of thousands of dollars in interest.
"We wanted to provide a better option for those looking to refinance their mortgage, but given the balance on their loan, it wasn't economically sensible," stated Blood. "We're usually cleaning the dust out of our keyboards around the end of the year, but since we debuted the Free-In-10, the phone hasn't stopped ringing."
US Federal is crediting a combination of factors for the program's success:
* Aggressive pricing. Free-In-10 debuted at a fixed 4.5% rate, and at press time was being is promoted at 4.75%. Because an appraisal is often not required, closing costs are typically as low as $499.
* A responsive staff. "Obviously the campaign wouldn't work if I didn't have a team that was interested in its success," said Blood.
* A streamlined process. Blood constructed the Free-In-10 to be quick and convenient. Documentation is dramatically reduced, the approval process is shortened, and closings can generally occur by mail.
* Creative marketing. The campaign uses a caterpillar-to-butterfly metamorphosis to signify the transformation of a traditional mortgage to the Free-In-10. Newsletter and direct mail copy ask the question "Still inching along on that 30-year term?" then offers the solution to "Transform and pay off your mortgage in a decade...or less."
The success of the Free-In-10 will see the initial campaign extended well into the new year.
