How to Get a Flexible Payment Option Mortgage
What it is
| At a Glance | |
|---|---|
| Loan Type: | Mortgage |
| Lender: | Bank |
| Secured: | Yes |
Flexible payment option mortgages come in many different packages to help people to obtain flexibility or convenience in homeownership financing. For instance, there is the interest only payment option, which is available on many types of mortgage products. This is a way for people to manage cash flow and lower monthly payments. The interest only payment option also maximizes tax deduction. Or, there is the pledged asset loan program that lets people finance 100 percent of their home without liquidating any assets. This is ideal for borrowers who wish to defer capital gains or losses and maintain their investment strategy.
Another type of flexible payment option mortgage is the lender paid mortgage insurance program. This is when a borrower gets one mortgage with as little as five percent down payment. Borrowers can avoid paying private mortgage insurance or having to obtain a second loan through another lender. There are also income and asset options that allow for a borrower's individual financial needs.
Who it's for
Typically, mortgages are made with interest rates between five and 10 percent with terms of 25 years or more. This type of mortgage is affordable to many people because of the long length of the term that makes the biweekly payments smaller. Flexible payment option mortgages are more affordable to many people because they can create a mortgage that suits their individual needs.
What you need to do to apply
In order to obtain a flexible payment option mortgage, interested applicants will need to contact a local lending institution and inquire about the different options and rates available. Personal and financial history, including a credit report, will need to be made available to the lending institution. A property appraisal may also be required.