MERIX Financial has found major success with a new interest-only mortgage.
Introduced in 2018, MERIX Financial’s interest-only mortgage fits easily into borrowers’ financial lives, according to Mortgage Broker News.
“Most people don’t like variable rates because there’s an inherent risk of it going up at any time, and it’s usually prime-plus-half,” said Jacques du Preez, the principal broker and owner of Mortgage Allies, as quoted in Mortgage Broker News.
“In this case you have interest that’s below prime, and you can have it at a fixed rate, which is great for somebody who wants stability. There’s no other such thing on the market right now.”
Homeowners can use an interest-only mortgage while qualifying on a 30-year amortization.
An example given on the MERIX Financial website outlines a $400,000 mortgage over 25 years at a 4% interest rate. The usual monthly payment would be approximately $1,902 per month. But if the borrower made interest-only payments, then the monthly payment would be approximately $1,321 per month, providing an extra $580 in monthly cash flow.
The innovation of the MERIX Financial product extends to various market segments. One client of du Preez’s is a couple looking to upgrade their house with stable and self-employed incomes. They can lock into the interest-only mortgage, and upgrade to a normal mortgage when they are ready.
Du Preez also pointed to the benefits for investors, who might take a variable-rate mortgage and then find their profits being eroded if interest rates increase.
MERIX Financial’s success points to the importance of technological innovation in the mortgage sector. Done well, it can be a gamechanger.
Another innovative mortgage product recently announced to market is XMC Mortgage’s student housing solution for mortgage brokers.
This allows a loan of up to $500,000 on a 30-year amortization with 70% LTV, so parents can buy second properties for their children to live in while attending post-secondary school.
Afterwards, the parents can either sell the property or retain it as a rental.
Thinking Outside the Mortgage Box
If you are considering launching an alternative product like these, there are several key items that can set you up for a successful venture.
Using property data and tools equals agility, scalability, and supports processing applications in volume. Knowing your market, what your targets are looking for, the demographics, and beyond is critical, as is being able to validate information quickly and efficiently.
This might include:
- Batch processing applications.
- Verifying ownership and property details while meeting with potential clients.
- Validating property value without a full appraisal at the application stage.
- And more.
Purview’s tools empower mortgage professionals to be innovative, successful, and think outside the box. Learn more about our solutions by calling 1-855-787-8439 or visiting www.purview.ca.
Purview is just one of Teranet’s Financial Services Solutions; stay tuned for our upcoming portfolio unveiling!