A Silver Lining to Rising Mortgage Rates
November 26, 2018
For much of the year, mortgage rates have been on the rise. No hopeful home buyer likes to hear this, but fortunately there IS a silver lining. As interest rates rise, lenders can afford to offer some more liberal loan products, which is exactly what we’re seeing this year. Below are a few of the more interesting new products that have become available:
40-Year Interest Only Loan: This loan allows you to amortize your loan over a 40-year period rather than 30, while making payments towards the interest only for the first 10 years. After 10 years, you make payments on the principal and interest based on a variable rate. The benefit is significantly lower monthly payments on the front end, though you’ll end up paying much more in interest over the life of your loan.
5% down payment on loans up to $1,500,000: Yes, you read that correctly. This means qualifying borrowers can buy a home worth up to $1,575,000 with only $75,000 (=5%) down!
Is money for your new home tied up in your current home? For years, this would mean you’d have to sell your current home before qualifying for a loan on your new home. Now, you can get approved for the loan on your new home as long as you sign a contract with your lender assuring that you will either sell or rent out your current home. This allows you take your time selling your home, with no need to request a long rent back!
For more information on these, and the many other new loan products available, feel free to reach out any time. We would be happy to refer you to one of our preferred loan advisers.