One part of the economy is a niche. A niche consists of something that many people are interested in. These interests can open up the market to new or expanding businesses and consumers that need financing. Many lenders are providing and servicing several types of economic niche loans.
One type of niche loan is a bi-weekly mortgage. This mortgage allows a payment twice per month instead of once per month. This can save borrowers thousands of dollars because the mortgage is paid more often which means the balance of a mortgage decreases sooner. A second type of niche financing is a construction-to-permanent mortgage. This type of mortgage is obtained by many new homebuyers. It provides a builder with increments of funding which encourages them to remain efficient. This mortgage also changes to permanent financing once a buyer occupies the home.An interest-only mortgage allows the buyer to pay on the interest only for a certain period of time. This means they can pay a lower payment during the beginning years of the mortgage. Interest-only financing usually has a higher interest rate because they are more risky for the lender. Another type of niche mortgage is a USDA mortgage. This mortgage is for home buyers who purchase property in a rural setting. This type of financing is beneficial to the buyer because the mortgage normally has low fees, easy qualification, and a zero down payment.
A Veteran specific type of niche mortgage is a VA 95% cash out mortgage. This type of mortgage financing allows a Veteran to take out up to 95% of a home’s value.
A reverse mortgage is a type of niche mortgage that allows homeowners, who are 62 or older, to take out financing against a home’s equity. The home does not have to be sold, the borrower does not have to take out a new mortgage, and the homeowner does not have to give the title up. The lender gives monthly payments to the buyer instead of the buyer giving payments to the lender. An FHA Energy Efficient Mortgage is a type of mortgage that helps homebuyers receive energy upgrades that are built into their mortgage loan. This mortgage will reduce the cost of utilities and add value to a home.
These are just a few types of niche financing, amidst many. The remaining types of economics niche mortgages are cash flow lending, future commission lending, and premium financing.