Cash Back Mortgages are an excellent option for First Time Home Buyers
With a cash back mortgage, your lender advances you a cash lump sum when your mortgage closes. The most common sum you receive is 5% of your mortgage amount but it’s possible to get between 1% and 7% depending on the lender you choose.
Whether you want to renovate, purchase furniture, pay back your borrowed deposit or simply have a cash buffer during the first few months of homeownership.
Purchasing a home for $450,000 would pay back $22,500 (5% cashback ) on closing.
This immediate flexibility will allow first time home buyers the ability to easily transition to home ownership.
It’s important to note that cash back mortgages always come with a fixed interest rate, and almost always charge a higher rate than standard mortgages. This is because lenders compensate for the additional money paid out upfront by charging a higher interest rate.
There is another drawback to getting a cash back mortgage. If you refinance or break your mortgage early, you will need to pay back a portion of your cash back rebate to your lender. Reach out today to get started on your first home purchase.