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How would you be interested in learning to finance a $2M dream home with no money out of your pocket and your only financial liability your closing cost? We are now finding a noticeable change in purchasing trends based upon the prevailing stock and bond markets. The consumer is turning toward real estate for investment purposes. There are programs which I find better suited for the “investor” buyer, or a second home buyer who will not occupy for a great length of time, and or those who plan to accelerate their amortization. Recently a client had inquired concerning the purchase of property which would be intended for himself as a second home as well as an investment during the off season. A prestigious address as well as the new construction feature seemed very attractive, a good choice for his investment purposes. The pre-construction purchase price was $2,000,000.00 and the client was looking to finance as much as possible at the best possible rate of interest. A couple of months prior to our meeting we had refinanced his primary residence which currently has a large amount of equity. Based upon this knowledge I suggested financing the full amount via cross-collateralization of his existing property. (The lien holder on the new property would simultaneously place a lien against the primary for the desired amount). The only financial obligation for my client would be closing costs. As for the best possible rate of interest; how does 5.36% sound? We chose a 6 month LIBOR ARM. As we speak the LIBOR Index is posted at 3.36%, add the margin of 2% for a rate of 5.36%! This program allows for the rate to remain fixed for six months and will adjust every six months with a cap of only 1% per adjustment no matter where the market goes. Other fabulous highlights of this mortgage include an interest only payment option which suits the client during the months when he would be occupying. In addition there in a convertibility feature, at any time the client can elect to convert his or her mortgage into a 30 or 15 year fixed-rate loan or an intermediate term ARM. In this situation the client had chosen to go with a full income and asset check loan, however if need be you can also have access to this program as a no-income and no asset verification type loan. The 6 month LIBOR is available for one to four family homes, condominiums, & NY city co-ops, primary residences, second homes and investment properties. Furthermore, consider this loan type for rate and term or cash-out refinances as well! (As an aside, those coming from overseas may purchase with no US credit history providing they are contributing at least 35% to the transaction.) This was the topic was discussed on Sheahan Television Productions House Television Channel 78 Cablevision. Michele Francis |
