The CashBack Mortgage puts money or cash to the pocket or bank account of the mortgagee or borrower whenever the mortgagor or borrower takes on a mortgage. The mortgagor or borrower gets a certain percentage back on the amount of mortgage. And, the money is free to spend on vacation, home improvements, investments, closing costs, moving costs, furniture, appliances, or other expenses.



I know what you are thinking. It sounds too good to be true. On the contrary, the mortgage lenders effectively use the CashBack Mortgage as a marketing tool. An extra money or cash just lures many borrowers.

Usually, the mortgage lenders gives 4%, 5%, or 6% cash back to mortgagor or borrower. To calculate the CashBack on Mortgage, you simply multiply the total amount of mortgage by the percentage of the CashBack Mortgage. For example, the borrower took a $250,000 with a 5% CashBack rate. The borrower sends $18,750 to their bank account.

The mortgage lenders approves up to 95% of the value of the property. That means the borrower pays at least 5% down payment.

Depending on the terms and conditions of the mortgage, the interest rate on a CashBack Mortgage may be slightly higher. For example, the mortgagor or borrower pays 5% interest rate without CashBack, or 6.5% interest rate with CashBack. For example, the borrower took a $250,000 mortgage amount, and 30 year mortgage. The borrower pays $1,342.05 mortgage monthly payment without CashBack, while the borrower pays $1,580.17 with CashBack. This may raise a red flag. Hold on to your horses. Suppose the borrower took 3 year mortgage term. After the 3 year mortgage term, the borrower paid a total of $48,313.80 without CashBack, or $56,886.12 with CashBack. The borrower pays an extra $8,575.32. With a 5% CashBack rate, it is still advantageous for the borrower. The $18,750.00 CashBack is greater than $8,575.32 extra payment on CashBack Mortgage.

Some mortgage lenders offer higher CashBack rate on longer mortgage term. For example, 4% CashBack rate on 3 year mortgage term, 5% CashBack rate on 4 year mortgage term, 6% CashBack rate on 5 year mortgage term, and so on.

The cash from CashBack Mortgage can also pay off the mortgage early. Basically, the principal goes down faster with any form of extra payment. The borrower can wish to pay extra on mortgage payment. As long as the extra payment does not exceed the allowable amount from the term and conditions of the mortgage, the borrower pays nothing on penalty.

The CashBack Mortgage is worth considering. Especially, you are a bit short of cash. This mortgage option may be advantageous. When you are shopping for the best CashBack Mortgage, the borrowers need to compare the mortgage term, CashBack rate, down payment, and interest rate.