Homequitybuilder

Worried about the payment shock from your 5-year fixed mortgage plan after the initial years are over?  Or are circumstances leading you to repay your balance during the initial period- costing you between 3,000- 7,000 pounds in charges?  Looking for a better, smarter mortgage alternative?

KL Mortgage Enterprises LLC (USA- based) and Alternative Mortgage Funding Company are excited to announce a brand new, revolutionary mortgage product called the Alternative Mortgage Fund (AMF).  The AMF will save your hard-earned money, and will also help shield you from the dreaded “payment shock” when either your mortgage scheme resets or the BOE raises its rates.  The AMF does this by applying more of your monthly payments to the loan’s principal paydown.  Just look at the following sample:

EXAMPLE: 250,000 loan amount/ 25 year term

Comparison of the AMF vs. a conventional 5/20 fixed mortgage (6.00% initial fixed/ BOE + 1.50% -currently 6.75%- after Year 5).  Both loans will accrue the same amount of interest payments over the full 25 year loan term, with no extra upfront costs or fees for the AMF.

*For simplicity, all numbers below are assuming no NET changes in the BOE base rates over the listed term.  The AMF is a combination of a fixed and variable mortgage.  As such, when the base rate rises, the borrower is affected less than the typical tracker or standard variable mortgage.  For further details, please contact the email addresses listed or feel free to post a comment.  Note that all values listed below are cumulative- from loan onset to Year noted.

Year Extra payments w/AMF  Extra PRIN pd w/AMF  AMF Net Benefit

  1           1102 pounds             1440 pounds         +342 pounds   

  3           3306 pounds             4122 pounds         +836 pounds

  5           5510 pounds             6485 pounds         +975 pounds

  7           4948 pounds             8493 pounds        +3545 pounds

  10         4105 pounds             10,730 pounds      +6625 pounds

Note the overall benefit of the AMF during the first 5 years of the mortgage, but also look at the incredible benefits should your mortgage last longer than the base 5 year period!  Many homebuyers choose a 3 or 5 year fixed mortgage scheme, and end up staying at their home much longer than this initial term.  If that’s you, it’s easy to see the advantage of the AMF if you think there’s a chance of staying in your home longer than 5 years.  In addition, the AMF has a very minimal early repayment charge (1% of repaid balance for the first 2 years of the loan only).  Compare that to most fixed rate schemes where an early payoff could cost you over 6,000 pounds!

As noted above, the AMF is not intended to be the mortgage scheme that allows for the least out-of-pocket payments from the borrower; it is a more conservative loan product which will benefit you from additional principal being paid down with each of your monthly repayments.  This additional principal gets deducted from your loan payoff amount when the time does come to move house or remortgage.

The AMF is currently not available, but we are now seeking the necessary arrangements in order to bring our product to market as soon as possible.  The AMF is not currently listed or approved by the FSA; our application is pending.  Your input and comments will assist us in this goal by providing needed consumer-direct feedback. 

Based on the previous example and the information provided, what is the likelihood that you would sign on to the AMF vs. a conventional 5 year fixed mortgage?

A) Over 50% likelihood would switch to the new AMF

B) Between 30%- 49%

C) Between 20%- 29%

D) Between 10%- 19%

E) Between 1%- 9%

F) Zero %

Thank you for your time and participation.  For more information, please contact:

amfinfo@blueyonder.co.uk   OR   amfinfo@comcast.net 

This entry was posted on Tuesday, February 27th, 2007 at 10:34 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.