John, I think you will find this interesting. I have been offering an innovative mortgage that enables homeowners to pay off their mortgages, on average, in under 8 years. This mortgage program has been available since 2005 and we have thousands of customers. The truly unique thing about this loan is that in its entire history, not a single homeowner has ever defaulted or fell into foreclosure. The reason? Yes, careful underwriting is part of it. But the rapid pay down of debt is the main reason for this statistic. And the reason people are able to pay it down so swiftly is because we use their checking and savings accounts to 'offset' their balance. This reduces interest costs which accelerates pay down. And, being a line of credit, everyone can aggressively pay down the debt knowing they never lose access to their funds. Each $1 "deposited" into the account is a dollar for dollar principal reduction AND creates a $1 of available credit. If more people had this loan, we would have far fewer struggling retirees. The reason we have so many struggling is specifically due to amortizing mortgages. Let me know if you would like more information on this, it might make for a very interest column for you!
Very true. Australia, New Zealand, I believe a couple European countries along with England & Canada. Banks don't make the same money they can make by selling 30 year fixed due to the secondary market which is why they aren't more prevalent. My commission is 50% greater when I originate 30 year fixed... That tells all. But my focus is on the loan because it is so much better for so many people.
John, I think you will find this interesting. I have been offering an innovative mortgage that enables homeowners to pay off their mortgages, on average, in under 8 years. This mortgage program has been available since 2005 and we have thousands of customers. The truly unique thing about this loan is that in its entire history, not a single homeowner has ever defaulted or fell into foreclosure. The reason? Yes, careful underwriting is part of it. But the rapid pay down of debt is the main reason for this statistic. And the reason people are able to pay it down so swiftly is because we use their checking and savings accounts to 'offset' their balance. This reduces interest costs which accelerates pay down. And, being a line of credit, everyone can aggressively pay down the debt knowing they never lose access to their funds. Each $1 "deposited" into the account is a dollar for dollar principal reduction AND creates a $1 of available credit. If more people had this loan, we would have far fewer struggling retirees. The reason we have so many struggling is specifically due to amortizing mortgages. Let me know if you would like more information on this, it might make for a very interest column for you!
Fascinating! Aren't these type of mortgages common in a few other countries?
Very true. Australia, New Zealand, I believe a couple European countries along with England & Canada. Banks don't make the same money they can make by selling 30 year fixed due to the secondary market which is why they aren't more prevalent. My commission is 50% greater when I originate 30 year fixed... That tells all. But my focus is on the loan because it is so much better for so many people.