Customize your own mortgage terms

The cat is out the bag…you can customize your loan terms and potentially get a much lower rate.

Odd term mortgages, almost unheard of years ago, are becoming more and more prevalent in today’s marketplace. The simple idea is that you can customize the loan term to match a financial goal or a major life event. In the past, these loans were only available through small banks or credit unions, but now most lenders can provide this option.

There is nothing unusual about this loan except the terms. The terms can range from 8 years to 29 years. They can be used for a new home purchase, cash-in or cash-out refinance with one of the most popular ways being a refinance.

There are several reasons why you would want to be in control of setting your own terms.

• You want to refinance but not extend the term of your loan. This loan is for you if you don’t want to re-set your loan terms back to 30 years when doing a traditional refinance. Example: You purchased your home three years ago and rates are lower, but the notion of “re-setting” your loan back to 30 years seems wasteful given all that you’ve paid the last three years. A 27-year loan is the perfect solution, so your payments are not in vain.

• You want to lower your interest rate and build equity faster. This loan is for you if you pay a little extra toward your mortgage every month as an attempt to pay it off sooner, but you would like to refinance to a lower rate. These loans tend to have lower interest rates.

• You want to customize your loan to your budget. This loan is for you if you want to customize a loan around what you can afford to pay by controlling the terms and possibly lowering the interest rate. This product can potentially shave years off the term of the loan and save you thousands of dollars in interest payments.

• You want to free up money to use for a major upcoming life event. This loan is for you if you have a major life event that you want to plan for such as retiring soon or sending a child to college. You can free up some money by paying off your loan early and eliminating the monthly mortgage payment at a time when you will need that money the most.

If you are an extremely disciplined person, you can accomplish strict payoff goals without the odd term loan by calculating the extra amount you would have to make to the principle each month and tailoring your payments to meet that date. If, however, you don’t have the financial discipline to make the extra payments consistently, you might want to consider a customized mortgage. The only downside is if your mortgage is paid off early, you lose the mortgage interest deduction on your taxes.

The odd term loan should be considered a financial tool for building equity quicker and shortening the term of your loan.

Smaller lenders and specialty lenders can run different amortization tables, so you can compare the payment and other details to see if this option is right for you.

Share Button

Mortgage Memo #16

Everything is marketing, for all businesses, no matter what business you are in, from Real Estate to Mortgages, to Accounting to a Medical practice, we are all customers and they are all a service in one form or another. If a Doctor consistently keeps patients waiting for 30 minutes at some point that Doctor is going to lose business, there are other doctors with more organized practices.

Marketing begins with first impressions, from how you look to how you shake hands. Are you dressed professionally? Do you smile, make eye contact, have a firm and friendly handshake?

How does your office space present, is it clean and neat and organized? What impression does your business give when people walk in the door? Is the staff energetic and friendly? Is the customer made to feel like they are the top priority?

How is your communication, is it clear and well written in email, or articulate and clear on the phone or in person?

Whatever business you are in, your marketing department starts with you. Your company could be spending millions on radio, television and billboard marketing, but if your personal brand is not in great shape no amount of marketing dollars will help you win in the game of sales.

Remember we are all in sales no matter what, and all day what we are doing is selling ourselves.

Share Button