Almost three years ago I tripped over a loan product that I absolutely believe is the best mortgage product on the market..... for the right individual. It has been dubbed the Home Ownership Accelerator and it originated in Australia and quickly spread to Europe where there is no subsidy for mortgage interest. Consequently the mortgage pays off very quickly. In many cases in half the time or less based on a 30 year mortgage term.
I closed three loans prior to October of 2008 and shortly after that the product was pulled from the market because investors (large pension funds, mutual funds etc.) would not buy or invest in this product. When that happened the liquidity for the product dies. Of the three loans that I closed, all three borrowers are enjoying an interest rate of roughly 1.25% or less for the last 18 months. Partially due to the low interest rate at least one of the borrowers has paid down almost $50,000 in principal in the last 18 months based on borrowing just a shade over $200,000.
Sound to good to be true. It isn't! One of the other 2 borrowers has paid down approximately $37,000 in the same time period. The great news is that this product is now available in some states and is spreading quickly toward the east coast. According the the primary investor it will be in Virginia, where I work and live, by late summer or early fall.
The possibilities on this loan are endless for the disciplined borrower! How much could you or would you enjoy your money if you were without a mortgage payment? How does it work and is it the right loan for you? Stay tuned and I will provide the data that will answer those questions in future blogs.