 Sam
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Joined: 21 May 2005
Posts: 286
Location: CALIFORNIA
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 Posted: Sat May 29, 2004 2:57 am Post subject: Pension Mortgage |
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Pension Mortgage is a kind of interest only mortgage, which is backed by a pension plan. It consists of:- Monthly interest payments to the lender.
- Payment of premiums into the pension fund.
In this type of mortgage, the borrower plans to use some or all of the cash lump sum, from a pension policy, to repay the mortgage at the end of the term.
For Example, Peter has taken a mortgage of $200,000 at 9% rate of interest for some personal reasons. He would pay $500 a month to the lender and $300 a month into a pension fund. The proceeds of the pension policy will help him to repay his mortgage debt after his retirement. This is known as pension mortgage. |
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