Newsroom

3/19/2004
MILA, INC. ANNOUNCES LAUNCH OF INTEREST ONLY OPTION

MOUNTLAKE TERRRACE, WA – MILA, Inc. has added an Interest Only option to their expanding mix of residential loan products. The launch of Interest Only, which became an official MILA offering March 22, 2004, coincided with the company’s Rate Sheet and credit policy overhaul that unified their lending process from the point-of-sale through closing.

"The addition of Interest Only gives MILA the opportunity to help brokers meet the needs of a greater range of borrowers, and help put more borrowers into homes,” explains Layne Sapp, MILA CEO. “Like any good lender, MILA exists to give borrowers the opportunity to own a home. At MILA, the best way we can do this is by helping the mortgage broker. Helping brokers close more loans as fast and as easily as possible allows them to take on more borrowers and process more loans than they can with other lenders.

"Our combination of rates, products and DecisionPoint, MILA’s automated underwriting system, makes MILA’s loan process one of the easiest and fastest in the country. This allows our brokers to fund loans for a wide array of potential homeowners.”

How Interest Only Works

With MILA’s Interest Only, the borrower pays only the interest on the mortgage in monthly installments for a fixed term. After this fixed term (MILA offers 2, 3 or 5 years terms), the loan re-amortizes and payments include interest and principal over the remaining life of the loan.

For Example: Borrower chooses a 3/27 Interest Only option at 5% interest. During the initial 3 years the borrower would pay 5% interest only. Based on a $100,000 loan this would equate to monthly mortgage payments equal to $416.66 versus a payment of $537.00 if the borrower were to choose a typical interest and principal loan product.

Special features of MILA’s Interest Only option include the ability to apply the option on owner occupied purchase or refinance properties; applies to Full Doc or Stated Income to 100 percent LTV: includes all property types, exclusive of 3-4 units; allows the borrower to pay additional principal as they deem necessary at time during the loan term.

Benefits for Borrowers Translate into Increased Loan Opportunities for Brokers

MILA’s Interest Only is ideal for borrowers looking for flexibility in their financial lives.
Brokers can position the Interest Only option to attract borrowers who:

• Live in areas where the cost of housing is high and appreciation gains are steady. Interest Only offers borrowers more opportunity to own homes. As housing costs rise throughout the country, this gives MILA and its brokers the ability to serve a growing number of borrowers. Interest Only allows borrowers to reduce their monthly payments and still afford to own a home.
• Missed the extremely low interest rates. People who calculated what they could afford when rates were 5.25 percent have realized their mortgage payments are going to be higher now that rates have gone up. With Interest Only they can still qualify for the homes they want.
• Want to invest or save for a big expenditure. Interest Only can be a good choice to reduce monthly mortgage payments in order to invest the money saved, or save for another big expenditure, like college tuition.
• For borrowers who move frequently (once every three years or more) an Interest Only option makes sense in areas where home appreciation is brisk. Although not paying down the principal, Interest Only borrowers in these areas will realize gains by appreciation.
• People whose income is sporadic. An executive supplementing his income with bonuses or a rising executive who expects to make a larger income in a few years can also benefit from Interest Only. Interest Only provides the lowest possible monthly payments for the lean months, yet allows the executive to pay off chunks of the principal once bonus or promotion time comes around.
• For those looking to maximize their cash flow, Interest Only option also makes sense.
  It allows this group, which includes seasoned investors and business owners, higher profit margins and frees up reinvestment capital.