Posted by Nancy on January 28, 1999 at 06:25:23:
Hi Judy:
Thanks for your response.
This must be a “new” type of mortgage for the general public offered by conventional lenders… I would think people would jump at the chance to pay off a loan so quickly and with such low mortgage payments…just wondered if this will be the trend or even if it’s legal.
Nancy (NC)
Homestead Mortgage Program??? - Posted by Nancy (NC)
Posted by Nancy (NC) on January 23, 1999 at 19:01:33:
Hi:
I got a brochure in the mail today from a company (Homestead Funding Group, Inc. and it also says Equality Mortgage Services, Inc. )advertising a mortgage where you pay less each month than you are currently paying for home mortgage and interest and pay it off in 5 years. Are any of you familiar with this? The downpayments are invested by them and this is how they can do this.
Supposedly the homeowner refinances the home in their name and invests 33% or 40%, depending on which program you are
interested in, into “the program”. Then they make a payment of 33%/60 or 10%/60 each month for the next 5 years to Homestead Program. There are lease options involved - one from the homeowner to the group and one from the group to the homeowner. It says it doesn’t matter what the rate of interest is as this is not a conventional type loan. You still get a tax break as the home is still in your name.
It gives the following examples:
On a $90,000 home loan, you put down 33% ($30,000) and have a monthly payment of 33%/60 or $30,000/60 or $500. If that same home were mortgaged for $90,000 over 30 years at 6.5% payments would would be $568.
On a $90,000 home loan, you would put down 40% ($36,000) and have a monthly payment of 10%/60 or $150.
The Homestead program pays property taxes and insurance for you.
I would love to get imput from people on this site about this.
Re: Homestead Mortgage Program??? - Posted by Judy
Posted by Judy on January 25, 1999 at 08:53:27:
I’m confused. Why would someone who’s being creative want to do this? You’re paying at least $30,000 out of your pocket.
Why not just do a creative NMD mortgage with the owner and then pay off the mortgage as fast (or as slow) as you want to?
Judy