A cash-saving mortgage could allow you to buy a home now
Many home buyers have special needs that are not met by the basic mortgage packages. Borrowers willing to take on higher debt in order to avoid extra costs at closing time should look into cash saving loans.
This section:
• Explains how you can free up cash at closing
• Describes how you can take advantage of low interest rates
In this section on special mortgages we take a look at bi-weekly mortgages, jumbo mortgages, zero down mortgages and express mortgages and more.
Refer to the table of contents if you're looking for specific information.
Save money on closing costs with a special cash saving mortgage.
This type of mortgage is designed for the borrower who doesn't mind taking on a higher level of debt in order to free up cash (for a large down payment, for example) at closing time.
The lender charged a higher interest rate on this mortgage in return for paying most or all of the non-recurring costs at closing. This does not include covering ongoing costs such as insurance, interest, and property/real estate taxes.
You may want to consider this mortgage option if interest rates are low, you want to buy as soon as possible, but you feel that lenders underestimate your debt-carrying abilities. If, for example, you are self-employed or are fairly sure your salary will rise in the near future, this type of mortgage may allow you to purchase a more expensive home than you'd otherwise be able to.
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Keep in mind that the higher interest rate on a cash-saving mortgage lasts over the life of the loan. If you plan on staying in your new home for any lengthy period of time your total interest bill may be quite high.
Of course, a cash-saver mortgage may also provide you with the only means of buying your dream home or catching rates when they're super-low and may be worth the added expense.
To summarize, if you want to start owning a home now, but will probably move again in the near future - you may want to consider a cash saver mortgage, particularly if you have trouble making a large enough down payment. You can start building home equity right away with little money down and the high interest bill won't affect you much.
Next: No closing cost mortgages
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