I know they are very different things. However, it would seem to me that lower credit score borrowers might on average be more interested in no frills mortgages than higher credit score borrowers. I may be mistaken, but that would be my suspicion. The fact that RMG was specifically targeting lower credit score borrowers, made me wonder also if they had more no frills mortgages as well.PaulMeredith wrote: ↑Aug 6th, 2017 3:23 pmLow credit score borrowers and no-frills mortgages are two completely different things. People with low credit scores would be suited to a B type lender. Many A lenders now have B sides as well. MCAP, RMG, Merix, B2B and Street Capital all have B sides to handle this type of borrower. Completely different from what you are looking for.
A no-frills mortgage is just a mortgage with lower prepayment privileges and quicker closing dates. Often 30 days closing and prepayment privileges of only 5%. This would still allow you to prepay up to $20,000 per year on a $400,000 mortgage... more then most ever use. Other than that, they are still full-featured mortgages for the most part, so the term 'no-frills' is a little misleading. No-frills mortgages haven't been very common in the past couple of years however.
Also, for context: The posts relate to my previous exchange with ace. He had stated his lowest rates have always been 1-year fixed or variable, whereas I had mentioned that the few times I had actually inquired about 1-year fixed, they were usually at best equivalent to the 2-year fixed rate quotes I was getting, or else sometimes worse. However, I was not interested in no frills mortgage rates, and had asked ace if his 1-year fixed (one of which was from RMG) was no frills.
BTW, while I have not used more than 5% of the pre-payment room every year, most years I have, with some years well over 10%. Why? Because I much prefer setting up my mortgage payment schedule with a bit lower payments, but allowing me to pay way more when possible. I do this by choosing longer amortizations than I have needed, but increase the payments using flexible monthly (or non-monthly) pre-payment options. Also, in many of these mortgages, once you have made pre-payments, you can also lower payments up to the same amounts. This allows a lot of flexibility in my repayment schedule. As mentioned earlier in the thread, it allows me to vary my payment amounts nearly at will. This is impossible with no frills mortgages.