Florida Needs Dutch Style Mortgages

Excitement has always been easy to find in Florida, but financial stability never has.  Florida is where you go to build a glamorous mansion and show it off on MTV Cribs, only to have a hurricane reduce your house to rubble by the time the episode airs.  It only makes sense that the most bone chilling scene in The Big Short took place in South Florida.  Even before homeowners’ insurance became prohibitively expensive, Florida has always been a destination for risk seekers, but now, even the most adventuresome Floridians are starting to understand that the party is over.  Floridians need affordable options for housing, but such options are increasingly difficult to find.  Perhaps Florida should borrow a page from the playbook of the Netherlands, where home mortgages gradually get less expensive over time.  Unfortunately, these types of mortgage loans are not readily available in the United States, but you can make strategic decisions to save as uc as possible on your mortgage loan.  For help finding your way out of trouble with your home mortgage loan, contact a Boca Raton foreclosure defense lawyer.

Behold the Mortgage Loan That Refinances Itself

A recent article on The Hill website extols the virtues of Dutch style mortgage loans, which are the usual way that home mortgages work in the Netherlands.  In the land of tulips and windmills, most banks issue home mortgage loans with repayment terms of the same duration as in the United States, but the difference is how the mortgage interest works.  In the U.S., if you are lucky, you get a fixed rate mortgage, where the bank promises you that the interest rate will never change until you pay off the loan in full or refinance it.  If you aren’t lucky, you get an adjustable-rate mortgage, where the interest rate remains stable for a few years, or even less than a year if you are really unlucky, but then it fluctuates according to the market rates, so that a mortgage payment that sees affordable at first can morph into a monster.

In the Netherlands, the loan agreements on home mortgage loans indicate that the interest rate gets lower over time.  From the bank’s perspective, the loan gets less risky the longer the borrower keeps making payments on it, because the outstanding principal keeps getting lower, plus the borrower has a proven track record of making payments on time.

How to Make Your Own Dutch Style Mortgage Loan With the Resources You Have

According to Dan Roccato of the University of San Diego, Americans should not hold our breath waiting for Dutch style mortgages to become available here.  The refinance market is just too lucrative for lenders, and so is issuing mortgage loans for investment property.  Your best bet is to get a fixed rate mortgage if you can and pay more than the minimum on the principal each month, so that you pay less in interest over the term of the loan.

Work With a Debt Lawyer About Saving on Mortgage Interest

A South Florida debt lawyer can help you reverse course if you are running into trouble with your home mortgage.  Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.

Source:

thehill.com/homenews/nexstar_media_wire/4579477-could-dutch-style-mortgages-work-in-the-us/