Cash back mortgages used to be about purchasing without 5% down payment. Today you still need to have saved the 5% down payment from your own funds for the purchase. There are cashback mortgages being offered today the incentive being so you can turn around and apply the cash back portion directly on the mortgage for a better effective rate, purchase new furniture, new appliances, or do some renovations on the new purchase.
The catch to the cash back mortgage is if you decide to break it midterm, which most people shouldn’t rule out because you may decide to sell, refinance, or something you just didn’t plan for changes in your life. The fine print is that you not only have to pay the interest penalty, you have to return the cash back portion to the bank.
I can work with you to see what options will work best for your situation sometimes the cash back might be the good option but there are other options like the purchase plus improvements or line of credits.
If you are thinking of the cash back mortgage give me a call and we can work together to find the best option for you.