Are you looking to buy a home while keeping your out-of-pocket costs low?
A home is your biggest financial investment and one of the greatest contributions to your net worth, but it can take 30 years to pay off a mortgage loan and several years to build substantial equity.
Financing Your Home is Possible
If you’ve set a goal of buying a home and building equity as quickly as possible, our new Equity Builder loan program - which is available in Alabama, Arizona, Colorado, Florida, Illinois, Indiana, Michigan, Ohio, Utah - offers the best of both worlds. This exceptional program combines 100% financing towards the purchase price of your home - it does not cover closing costs or transaction fees - with a 20-year repayment term. Equity Builder shrinks the time you’ll spend saving for a down payment, reduces the total interest you’ll pay over the life of a loan compared to a traditional 30-year term and helps you to build equity more quickly in stable or improving real estate markets.
How the Equity Builder Home Loan Works
So, whether you prefer being mortgage-free before retirement or you want to reduce how much you pay in mortgage interest, here’s what you need to know about the Equity Builder program.
- 100% financing of the purchase price of your home is available. This is a unique feature of Equity Builder because most home loan programs require a down payment. Your loan amount cannot exceed the lower of the purchase price or appraised value of the home. Costs associated with the transaction (e.g. closing costs, prepaid interest, fees paid to reduce your interest rate, etc.) cannot be included in the loan amount.
- You must contribute 1% or $1,000 (whichever is greater) towards costs associated with the transaction (e.g. closing costs, prepaid interest, fees paid to reduce your interest rate, etc.). This minimum investment can be gifted if certain conditions are met – check with one of our loan officers for details.
- Pay off your home faster. The Equity Builder program is designed to help you pay off your mortgage sooner. Instead of a 30-year mortgage, Equity Builder offers a 20-year term. This is perfect if you can afford to put a little extra toward your mortgage payment each month. Accelerating your mortgage term is also beneficial if you’re retiring in the next 10, 15 or 20 years and don’t want to carry a mortgage into retirement. Eliminating your payment can stretch your retirement dollars further and let you live the life you want.
- Pay less interest. Because you’re opting for a shorter loan term, you’ll also pay less interest over the life of your mortgage, reducing your overall expense.
- Build equity faster. A shorter mortgage term also means you’ll build equity faster compared to someone with a 30-year mortgage. In other words, you’ll own more of your house sooner assuming that real estate market conditions in your area are either stable or improving. Plus, if you choose to sell the home before the end of your mortgage term, more equity equates to a bigger profit and a bigger down payment on your next home purchase. Building equity and having a greater stake in your home lowers the risk of foreclosure and offers peace of mind.
Given the number of mortgage programs available, you might not know all your options until you speak with a home loan expert. For more information about the Wealth Builder program, or to learn if you’re eligible, contact our loan specialists at Cherry Creek Mortgage and discover how this loan can open the door to homeownership and prepare the way for wealth.
This material is informational only and not an advertisement to extend credit as defined by TILA/Regulation Z nor an application for credit as defined by RESPA/Regulation X. All applications are subject to underwriting approval and determining applicant’s ability to repay. Not all applicants are eligible for or qualify for all loan products offered. All loan programs, terms and conditions are subject to change without notice. Rates and terms are valid as of the date of printing/distribution.