Did you know mortgages can come with some special features? Yeah, neither did I, not until I decided to become a trusted mortgage professional.
Sometimes, we all need things to be a bit more flexible for them to work for us. Here are some of the special features that can be included in a mortgage.
Assumability
This type of mortgage allows a buyer to take over a mortgage that’s already in place – hence, assumable. All of the features, such as payments, rates, amount will all remain the same until the end of the current term. This is best used when the current rate on the mortgage is lower that what’s available on the market. Another tidbit with assumable mortgages, when a new purchaser assumes a mortgage, the previous borrower is released from the loan.
Portability
For those that need to relocate every few years, this feature will work best to your advantage and convenience. This feature will all the buyer to essentially transfer the mortgage to a new property. This is all subject to another credit approval and the value of the new property as well.
Expandable Mortgage
With this option, the borrower is allowed to increase the principal of the mortgage. This feature is generally used for home renovations and value add activities as it will significantly increase the appreciation to the property.
Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit is a feature where the lenders will take up to 65% of the equity of a property and can be used as a line of credit. For example, if there is $100,000 worth of equity on a property, the bank will consider up to a maximum of 65% of that which would equal up to a $65,000 line of credit. Check out my blog here for more refinance information.
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