United Wholesale Mortgage just rolled out a new product that it hopes will prove attractive to a large segment of borrowers. The company is now offering an interest-only financing program for borrowers who want to save on additional, monthly discretionary income.
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The program requires a 20% down payment on the cost of a loan, and borrowers must have a minimum FICO score of 720 and a 42 debt-to-income.
Additionally, borrowers will be required to begin paying down the principal of the loan after 10 years.
"We expect the program to be an incredibly popular option for well-informed borrowers, and in turn, a significant boom for mortgage originators," said United Wholesale Mortgage CEO Mat Ishbia.
"The purpose of the program is not to enable a consumer to afford a larger house; it's for savvy borrowers who can regularly afford a house on a 30-year fixed mortgage, but choose the interest-only option to save additional discretionary income," said Ishbia.
UWM is making interest-only financing more mainstream by broadening its reach to mortgage brokers, correspondents, small banks and local credit unions throughout the country. Large banking institutions have widely offered this option, but mostly restricted its availability to jumbo borrowers.
By making the interest-only financing option available to qualified borrowers through mortgage brokers, UWM continues to elevate the value that brokers provide in the mortgage industry and raise awareness of their benefit to borrowers. Further, the availability of alternative financing through the wholesale channel strengthens the ability of brokers to help a broad range of qualified borrowers achieve their dreams of home ownership.