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United Wholesale Mortgage (UWM) this week extended its temporary waiver offer amid high-interest rates and stiff competition.
The Detroit-based lender now pays borrowers a 3 percent down payment for the first year of the loan, compared to the maximum rate of 2 percent previously offered.
UWM announced Wednesday that it is also launching a Lender Pay version as an alternative to its Merchant Payments product.
Borrowers who opt out will pay lower mortgage payments in the first, second, and third years of the loan. You will be charged full price for the remainder of the term.
You can temporarily take advantage of a lower interest rate by immediately depositing money into your checking account. Part of this advance is released monthly to cover the borrower’s advance.
In the seller payment option, the seller’s discount, which is the closing cost the seller has agreed to pay, is deposited into an escrow account in a lump sum.
A company spokesperson said that with UWM borrowers’ new payment options, “loan-level price adjustments will be added to interest rates to cover the cost of loans to borrowers.”
This product expansion comes shortly after the launch of the 2-1 and 1-0 purchases that UWM pays only through merchant discounts in mid-August.
Borrowers using the 2-1 transfer option, which has an average market rate of 5.22% for 30-year fixed mortgages as of August, can take advantage of the seller’s rebate to bring future interest rates down to 3.22 %. . 4.22% per annum. % in the second year.
The borrower pays 5.22% over 3 to 30 years. On the other hand, a 1-0 buy-in drops the rate from 5.22% to 4.22% in the first year only. Next year, the loan will return to the original rate.
The company’s new 3-2-1 and 1-1 purchases are now also options for borrowers.
Mortgage rates are 6.60% as of Wednesday morning, and borrowers with a 3-2-1 swap can use loan funds or seller discounts to lower rates to 3.60% in the first year, 4.60% in the second year, and 5.60% cent in the second year. % in the second year. 3rd year%. From there, they pay 6.60% for four to 30 years.
With UWM’s 1% repurchase option, the borrower pays 5.60% for the first two years.
This rate than returns to the initial fixed rate in year 3 and continues throughout the term.
According to UWM, temporary interest rate waivers during periods of rising interest rates are a great opportunity for borrowers who want lower interest rates to save on monthly mortgage payments at the beginning of their loans.
According to the company, this is a great option for borrowers who expect their income to increase over the next few years or who can take advantage of seller discounts and lower prepayment rates.
UWM products are available for general primary and secondary home purchases, as well as Federal Housing Administration (FHA) and Veterans Affairs (VA) primary home purchases.
Starting in September, UWM’s main competitor, Rocket Mortgage, lowered monthly mortgage payments for homebuyers by 1 percentage point in the first year of loans.
Called “Fighting Inflation,” the program allows borrowers to address high inflation and affordability issues, the company said.
Reference Source: Housing Wire
