Wealth Building Home Loan program gives buyers an opportunity to pay off mortgage faster with less risk.
There are many home loan types available to home buyers. The most popular is the traditional 30 year fixed-rate mortgage. However, these loans, while usually offering some of the best rates to qualified buyers, require a down payment of 20%. There are other loan options with lower down payment qualifications. The ARM (Adjustable Rate Mortgage) is an option used by many who are looking to get into a home with a lower mortgage payment to start, but know that their interest rate (And loan payment) will eventually rise over time.
Other low or zero down home loans come with higher costs or rates, or come with limits attached to the total amount one can borrow. Finally, there’s the 15 year fixed-rate mortgage. This is great for anyone who wishes to pay off their home loan in half the time it takes to pay off a traditional mortgage. The drawback for this type of loan has always been its higher monthly payment.
Good news for home buyers who want the best of both worlds!
Recently, a new loan, called the Wealth Building Home Loan (WBHL) was created through the American Enterprise Institute that offers a 15 year mortgage to qualified home buyers with zero down payment. Even better news comes in the form of a mortgage rate that’s .75 percent lower than the FHA 30 year rate. This means that qualified buyers can outright own their home in half the time, while also making loan payments that are more competitive with 30 year fixed rate mortgages.
But wait…There’s even BETTER news! Rather than putting any saved money you have as a down payment, you can use these funds instead to buy down the interest rate, giving you an even lower monthly mortgage payment.
The creators of this loan, Bruce Marks and Edward Pinto, work on the principle that rather than entering into a “debt model,” this type of loan creates a “wealth model,” in that you’re building equity in your home faster through paying more toward your principle each month at a lower rate.
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