Interest-Only Mortgages Set to Make a Cautious Comebackadmin / 0 Comments /
United Wholesale Mortgage, the nation’s second-largest wholesale mortgage lender, is expected to bring back interest-only mortgages as early as next month. The loan, which all but disappeared after the housing crisis, will offer initial interest rates that are slightly higher than a five-year ARM. After five years, the rate will adjust as much as two percent annually and five percent overall with borrowers required to pay down the loan after 10 years. These tricky loans caused many borrowers to go into foreclosure during the housing crisis because lenders qualified them based on their ability to pay the initial payments not the future payments. United Wholesale Mortgage says they will only make these loans to qualified borrowers who can pay 20 percent down, have a 720 credit score and whose future payments would not exceed 42 percent of their current income.
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