Area Lenders Not Hot On 50-Year Mortgage
by June 5, 2006 12:00 am 86 views
A handful of Northwest Arkansas lenders said they’re not looking at the new 50-year mortgage product — not yet anyway.
Tim McClung, president of England Lending in Bentonville, said that if the product is available through the companies he sells his loans to on the secondary market, and if there is demand for it, he’ll offer it.
“It’s no worse than an interest-only mortgage,” McClung said, “and we do those every day.”
Chris Morrison, executive vice president of mortgage lending for Signature Bank of Arkansas, echoed McClung. None of the bank’s “investors” (secondary market buyers) offers it now, she said, but some companies Signature is negotiating with do.
“For the right borrower, it’s probably fine,” Morrison said.
The mortgage has been criticized nationally because the buyer isn’t building equity and the rates are adjustable, so they could rise. Still, some lenders say it will allow some people to get into homes they might not otherwise be able to afford.
Todd White, senior vice president and loan production manager of Arvest Mortgage Co. in Lowell, said the bank and the mortgage company aren’t looking at offering the product yet. Arvest offers an interest-only and a 40-year mortgage, White said.
Arvest’s combined mortgage operations produced more than $1 billion in mortgages in Benton and Washington counties in 2003 and 2004.
The company will come out with some new mortgage products by the end of the summer, White said, though those products aren’t necessarily new to the market, they are new to Arvest Mortgage.
“I think if we were going to offer [the 50-year mortgage], we’d like to be first,” he said.
Click here for a look at perplexing payments on a $250,000 house at 7 percent interest.