Cash Back Mortgage

 

Look around and you are almost certain to find a lender promoting a CASH BACK MORTGAGE. Is it as good as it sounds? You have to consider the terms and conditions set out by the lender. Like all mortgage decisions it depends on a number of factors like the Cash Back % Rate, the Term, the lender’s "POSTED " Rate, the Current Discounted ‘Best‘ Rate and whether or not you apply the CASH BACK towards the initial mortgage amount at closing. If you apply the CASH BACK against the initial mortgage amount it could be a good deal. If you don't it is definitely a deal that carries a cost. Compare the CASH BACK MORTGAGE to a DISCOUNTED "BEST RATE" MORTGAGE using the Cash Back Calculator.


Example:
Assume a lender offers a 3% Cash Back on their 5 year term mortgage. The lender’s Posted Rate is 6.75% and the lender’s Discounted ‘Best‘ Rate is 5.75% for the 5 year term mortgage. Assume a 25 year amortization and a mortgage amount of $200,000.00.
Calculate which is better, you be the judge.


Answers:
Choice 2: To get your hands on $6,000.00 it cost you $1,911.40 over 5 years
Choice 3: Choice 1 (The applied Cash Back) is $648.12 better than Choice 3
Choice 4: The 1% Discounted Rate would have saved you $1,767.58 over 5 Years
If you are ready to apply online for a Cash Back mortgage Click Now and begin the Mortgage Alliance two part application process, or if you have any questions Email or call us at 416-837-6761.


Note: In fairness to the lender it really depends on their marketing integrity. The spread between the Lender’s ‘Posted‘ Rate and the best available Discounted ‘Best Rate‘ and the Cash Back % Rate are the keys.