Magazine article American Banker

Marketer Combines Home Loan with Annuity

Magazine article American Banker

Marketer Combines Home Loan with Annuity

Article excerpt

Buying a home as an investment takes on a new twist with the development of something called an asset-integrated mortgage.

It is a traditional mortgage loan coupled with an annuity.

Borrowers initially pay both a down payment on the house and an additional amount that is put into the annuity. The investment can be drawn upon in a time of need and acts as a buffer against sliding property values.

The loan packages are being marketed to lenders by Financial Integration, a Cleveland-based financial products developer, which couples conforming and jumbo loans with the annuities. The annuities are tax-deferred and at fixed rates.

New Products Sought

With loan volume sagging, lenders have been seeking additional products to stimulate originations. Financial Integration says it has signed up a number of large mortgage companies and has several others about to come aboard, but it would not disclose their identities.

A number of other companies also offer or are considering loans combined with an asset feature. Financial Integration said other types of investments could also be used instead of an annuity, but it has no plans to offer alternatives.

The company uses insurance products rated triple-A to guarantee a return of principal. It is working with several insurance companies, including American International Group, New York, and American General Corp., Houston, to provide the annuities. The conforming loans can be sold on a negotiated basis to the Federal National Mortgage Association. …

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