The lender reports that this type of loan product seeks to reduce payment shock and offer increased flexibility for the investor-borrower. Mortgage payment shock happens when a borrower has difficulty making their regular mortgage payments due to changes in interest rates or other factors. The objective of velocity's investor mortgage is to provide a solution which allows a borrower to make steady mortgage payments while also allowing them the flexibility to invest in real estate investments.
The investor mortgage allows eligible borrowers to take advantage of low fixed rate products, with terms ranging from seven to thirty years. At any time during the loan term, the borrower can elect to refinance with velocity and up to five times during the loan term, the borrower may switch between fixed and adjustable rate products without having to incur additional costs. The investor mortgage also offers a "step-up" feature which allows the borrower to pay more towards the principal at any time without restrictions. In addition, velocity has put in place a number of other borrower-centric features designed to help manage risk and control costs.
For instance, investors may opt to have their loan serviced by either velocity or a third party. Additionally, investors can choose to have their loans placed in a special portfolio for management purposes, like funds for rehabilitation or repairs. This means that investors can customize their mortgage payment structure to suit their individual needs.
Overall, velocity's investor mortgage offers a great way for real estate investors to better manage their mortgage payments and have more control over their mortgage expenses. By allowing borrowers to switch between fixed and adjustable rate products, they can better manage the risk associated with changing interest rates. Furthermore, with the ability to pay extra towards the principal at any time and to take advantage of portfolio management options, real estate investments can be better managed. For borrowers who want to avoid the potential for payment shock, the velocity investor mortgage is an attractive option.
This article was contributed on Jun 30, 2023