Some secured loan programs now offer no payments for the first 6 months
I found a flyer today in my mail box from empire financial titled NO PAYMENTS FOR 6 MONTHS. The flyer read ‘Move your buyers into their dream home without making a mortgage payment for up to the first six months with the buyers’ Bonus Mortgage Program’.
I think it is good that many finance companies are trying to make the secured loan market more innovative. Sometimes to complete sales one is required to keep all those type of programs in the back of his head, although I’m not seeking financing myself - yet my buyers are, and sometimes I need just to point them out to some loan programs that I might know, and they don’t.
It doesn’t need a lot of time to figure out that someone has to make the payments for those six months of mortgage, after all the lender always wants to make the interest on a loan so they won’t just let the buyer go without paying for six months. At the very bottom of the flyer I found a note that reads ‘Borrower is required to pay all monthly escrow items (such as real estate taxes, hazard insurance, and, as applicable, flood insurance and or mortgage insurance) during the period that the seller/builder pays Borrower’s monthly mortgage principal and interest payments. Maximum builder/seller contribution limits apply and vary by Total-Loan-to-Value (TLTV) ratio. Offer valid only on residential mortgage loans originated for the purpose of purchasing a newly constructed house or resale transaction from a designated builder/seller who has agreed to participate in this program. Prices and programs subject to change without notice. Subject to credit approval’.
I haven’t heard about such mortgage programs before, and still not that much educated about it. However, any effort made to create new ideas in the real estate market will be greatly rewarded now as the market is starving for a floating hay to grab to. I can’t count how many time I hear any read in the radio about how things are going to be worse, and how the bubble will also get banks that did not participate in sub-prime lending.
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