Property Mortgage is a significant step in everyone’s life. It is this loan that is used to finance your dream of owning a house. When you are looking for financing Mortgage broker Vaughan will help you to figure out the ideal deal for your mortgage needs. As a mortgage is a loan, it needs to be paid back. The sooner you can pay back this amount, the less stress it would be for you. We will be sharing with you different types of mortgages and how you can quickly pay them off.
Different types of mortgages
Open Mortgage: When you are looking for larger payment options or want to pay the full amount before the amortization period ends without having to pay penalties. Then, you should opt for an open mortgage.
Closed Mortgage: The term ‘fixed’ can also be used to define this type of mortgage as the terms and conditions remain fixed till all the payments have been made. As there are fixed conditions, it is an easier to manage option.
Convertible mortgage: This type of mortgage provides the borrower with the opportunity to change the mortgage terms. This type of mortgage usually starts as an open mortgage. With time, it changes into a closed mortgage.
Reverse Mortgage: The Reverse mortgage gives the borrower the power to draw out money from the equity to be used for daily expenses. This mortgage has been specially designed for elderly borrowers.
How can you quickly pay off your mortgage?
Paying back your mortgage can be a long and painstaking process. Sometimes some people have the opportunity to pay back the mortgage before the scheduled time. When you have the finances available to do it, you should make it happen. We are sharing some of the pay-off strategies which can help you.
Increase the frequency of the payment: The payment’s frequency can be increased than what has been stated in the contract. You can also negotiate and opt for weekly or biweekly payments.
Making Anniversary payments: Many mortgage deals allow you to pay about 20% of the mortgage balance every year. You can choose to make this prepayment with the bonus or tax refunds that you would be getting.
Paying in Lump sum: When the repayments are paid in a lump sum, it can help to bring down the cost drastically.
Down payment: When it comes to paying down payments multiple options are available to you. You can choose to pay a larger amount or the bare minimum required by the law. When you have finances available you can choose to double the down payment amount. This will also help you to avoid paying the insurance on the mortgage.
A short Amortization period: When the amortization period is short, you will be paying larger amounts as payments. It is not advised to opt for a longer amortization period as you would end up paying a higher rate of interest for that.