There are benefits to using a 40-year mortgage loan. And there are benefits to using Interest-Only loans. But Newfi has done one better … it has produced a hybrid, offering the best of both loans!
Here are five ways that Newfi’s 40-year Interest-Only mortgage is revolutionizing the home lending industry. We pride ourselves on bring our clients the very deepest options available.
LOCK IN THE RATES
Who knows what the future holds? Mortgage interest rates are emerging from a long period of record lows. With Newfi’s 40-year IO, borrowers can lock in the still-low interest rates and know exactly where that rate will be in 2061! You’ll be able to set your books on it and know exactly what your payments will be. Get peace of mind in knowing your rate won’t change, and still get the savings mechanism of the interest-only.
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With the interest-only feature, for the initial term, it’s almost like renting your home, while still accumulating equity from property value increases. Because you’re not required to make any payments to the principal, it keeps your monthly costs lower. New buyers can use the interest-only period over the first ten years to reduce monthly payments, allowing them to use the savings to cover other expenses encountered by new homeowners. Need to upgrade the ancient fridge? Paint the house? Put your savings toward costs associated with furnishing. It’s a great way for borrowers to get used to making their mortgage payments at a lower monthly amount, before starting to pay off the principal balance.
NO PREPAYMENT PENALTY
After the initial ten-year Interest-Only period, payments to principal and interest recast on the value of the principal. So, if the borrower had made any principal payments, or even a lump sum payment in the ninth year, the mortgage would recast at the lower amount, and continue for the remaining 30 years. Again, you have already locked in the low rate for the entire 40-year duration of the loan!
INVESTMENT PORTFOLIO SUPERSTAR
The 40-year Interest-Only Investment Property option is used aggressively by borrowers looking to maximize their liquidity from their non-owner portfolio. This is where savvy investors can be used their properties to strengthen each other. By taking large cash-out sums from one property, borrowers can pay down the principal on a different 40-year IO property before the loan recasts. You are cash-flowing your portfolio, paying less out than what is coming in.
FLEXIBLE QUALIFYING OPTIONS
Newfi’s 40-year Interest-Only offers some of the most generous qualifying scenarios in the industry. Borrowers can qualify based on the standard 30-year amortization (which qualifies the borrower for the most money). Also, the debt threshold is considerably higher than standard conventional loans, which increases borrowers’ purchasing power, or increases available cash out for refinances.
Newfi’s hybrid approach is revolutionary for the mortgage industry. You can get the best of both worlds – the low initial payments of interest-only, with the peace of mind of having a low fixed rate over its 40-year term. Call Newfi and get started today.