It’s easy to look online for a mortgage rate. However, the rate is only one aspect of saving money on your mortgage over the long term. It’s essential that you also consider mortgage features. Here are the big ones –
Early Payout Penalties.
There are many reasons why breaking your mortgage makes good financial sense, even though you can expect to pay a penalty. However, not all lenders calculate penalties similarly; the differences can amount to thousands. Life happens, so make sure you choose a lender that has a fair pre-payment penalty. And watch out for no-frill mortgages that don’t let you get out of your mortgage unless you sell or the term is up.
Pre-Payment Privileges.
You want the ability to put lump sum amounts on your mortgage and increase your payments so you can pay down your mortgage faster and save on interest. You should always consider having this flexibility even if you don’t think you’ll use it; your situation may change, which gives you the ability to pre-pay. This flexibility can also help you reduce an early payout penalty.
Collateral charge mortgage.
This type of mortgage can be challenging to transfer to another lender and cost you legal fees if you do. You are more locked in, which means your lender may not offer you the best rates if you need to refinance or at renewal. Watch out!
Porting Flexibility.
This is important if you’re likely to move, e.g., due to a job change or a growing family. You’ll want to transfer your mortgage to your new place to avoid penalties. But make sure your lender lets you increase it too, should you buy a more expensive home.
Blended Mortgage.
If you move or refinance, a blended mortgage allows you to combine your current mortgage rate with the rate on the additional funds. This way, you don’t pay your current mortgage and incur the penalty. Some lenders blend and extend to a new 5-year term, while others blend only to the remaining term or offer both.
There is more to getting a mortgage than just a rate. It’s my job to help you find the right mortgage with the rate and flexibility you need to be a happy homeowner. Let’s talk today.
