Not So Common Mortgage Loans
Mortgage loans that are commonly used are something that most everyone knows about. But did you know that there are other loan types available as well that are not that widely availed, but offered all the same by several lenders? During the days of the housing bubble, these loans were all very popular, but the same cannot be said in today’s era. So are these loans really out for good, and or are they just waiting for the right time to spring back up again? Let’s find out.
Also known as liar loans, the stated income loans provided many borrowers to buy unaffordable mortgages for themselves. The name has been given simply because no lender is going to ask you for proof of your income. State any amount you like and the lender will believe without any second questions.
These loans have remained out of the market for quite some time, but they might just reappear in the future. Specialized lenders are now offering them once again so that self employed individuals can enjoy their benefits.
No Money Down
The name makes it quite obvious that this type of mortgage did not require any down payment during the first five years of the last decade in the loan term. Today, it is very likely you won’t find a lender that is going to offer you a mortgage unless you make a minimum down payment, but the no prepayment mortgage has not been completely wiped out.
As long as you are an active member of the military or a qualified VA, you can still avail the no money down mortgage and skip paying the down payment altogether or pay an amount as low as 3% of the home’s value.
In the past if any borrower had a limited budget, he could avoid paying the principal amounts for certain periods of time. These amounts could be paid at anytime in the future or the loans could be refinanced. However, some time after this, came an era in which property values fell and mortgage refinancing was not an option anymore. The only two choices were to either pay the principle loan or lose the home in a foreclosure.
Today, interest only mortgage loans are not found in the real estate industry, but in the home construction industry, you can still spot them. Builders can avail this loan for short terms, and later on get them converted to amortizing loans when the project is completed.
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