In the past, there were very few different ways that people could buy a home. The process was very specific. If you couldn’t meet the requirements, you simply had to wait to buy a home until you could meet the strict requirements for a mortgage.
But today, there are so many different mortgage programs available for different types of people. Everyone’s financial situation is different.
We have different levels of income, different long-term goals, different financial management styles. It doesn’t make sense for everyone to be boxed into one or two mortgage programs.
The all-in-one mortgage is the perfect example of a revolutionary mortgage program that will work very well for many would-be home buyers.
This unique program is much more flexible than most other mortgages. When you have conventional loans, once you make a monthly payment, that money is forever inaccessible.
You could go through the long and costly process of refinancing if you needed to access your equity for any reason. But with an all-in-one mortgage, the money you pay towards your home is always accessible.
So what exactly is an all-in-one mortgage and how can it benefit you? Keep reading to find out.
1. An All-In-One Mortgage Combines Accounts
The key benefit of an all-in-one mortgage is that it combines 3 important accounts into one; your mortgage, a HELOC, and your checking account.
Each deposit into your account, such as your paycheck or other deposit, pays down the principal and interest of your mortgage. It also functions as a HELOC, or home equity line of credit.
The equity you have in your home is the difference between your home’s value and your current loan balance. Traditionally, when you make mortgage payments, that increased equity is inaccessible unless you apply for a separate line of credit.
With an all-in-one mortgage, your line of credit is built. You can use your equity at any time.
2. Equity Is Accessible
An unfortunate reality of most traditional mortgage programs is that the money you use to pay down your mortgage is inaccessible. But since a line of credit is built-in to your mortgage, you always have access to your equity.
So if an emergency comes up and you need money, it’s available. Or if you’d like to perform upgrades in your home, you can do so right away.
You don’t have to apply for separate loans or lines of credit. You have control over your equity and your money. Using your equity is as easy as using your debit card.
3. Save on Interest
All-in-one mortgages give you the ability to save on interest over the life of your loan. Your interest is calculated based on the total amount in your savings account.
So the more money you deposit into the account, the lower your interest payments will be. Over the course of your loan, this could save thousands of dollars.
4. Pay off Your Mortgage Faster
As with saving on interest, the deposits into your savings account can also shave years off the life of your loan. An all-in-one mortgage makes it much easier to pay down your loan quicker.
This comes with a caveat, however. Those looking to pay down their loan faster need to be financially disciplined since the equity in their home is always available for use.
But the flexibility regarding their mortgage, their interest savings, and their payoff times is huge.
5. Higher Rate of Return
Those with conventional mortgages may save money in traditional savings accounts. These accounts yield very small returns, often only 0.05% or so.
Rather than making virtually no interest, you can “save” your money in your all-in-one mortgage. Every dollar you deposit into this account saves on interest, which depending on your interest rate, can be between 3% and 7% yielding a much higher return on your deposits.
6. Every Dollar You Make Can Pay Down Your Mortgage
Because you’ll use this savings account as your main bank account, every dollar you receive will pay down your loan and save on interest. This can include your paychecks, gifts, money from a side hustle, or even a tax return.
You’ll be paying down your loan and growing your wealth on autopilot.
7. Instant Liquidity When You Need It
Nobody loves emergencies. But when they happen, it’s important to have money ready to cover surprise expenses.
This could be your car breaking down, your home furnace going out, or a medical emergency. These need to be paid for quickly and using a credit card or other loan will come with a much higher interest rate.
Instead, you can access your equity, the money you’ve already earned to cover emergency expenses if needed. The equity is always instantly available.
8. Flexible Monthly Payments
There’s also flexibility regarding your monthly payments. If something happens and you don’t have enough money to cover your monthly payment, no minimum payment will be required.
The minimum interest payment that is due is just advanced from your current credit line. You won’t have to deal with the negative connotations of missing a mortgage payment.
9. Reversible Mortgage
A traditional mortgage process is irreversible. That is, if you make extra money or want to make additional mortgage payments, you can. But once you do, that money is no longer accessible. You’ve essentially locked it into your equity.
All-in-one mortgages are fully reversible. So go ahead and deposit extra money into your account, paying down your loan balance. You can so without hesitation since you can always reverse that decision and access those funds at any time.
10. Simplified Account Management
If you don’t have an all-in-one mortgage, you’ll have a lot of other accounts to deal with. You’ll have a separate mortgage account and monthly payments.
You’ll have your checking and savings accounts separate from your mortgage. Then, if you want to access your home’s equity, you’ll have to apply for a separate HELOC account.
An all-in-one mortgage makes it much easier to manage your accounts since they are combined into one.
Is an All-In-One Mortgage Right For You?
An all-in-one mortgage has its clear advantages; it’s flexible, it’s reversible, and it’s accessible. It’s perfect for those who are financially disciplined, as they have equity when they need it.
But you can also save thousands on interest and pay your mortgage off much faster than a conventional mortgage.
Want to know if this program is right for you? Contact Sean and the team at Ascend Mortgage today for advice on getting the perfect loan.