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Understanding Mortgage Features

MORTGAGE TYPES

Today, more than ever, there are numerous mortgage features and options available.

Fixed-rate: 6 month, 1, 2 and 3 year (open, closed and closed-convertible) 4, 5, 7 and 10 year closed

Variable-rate: 3 and 5 year (open, closed, closed-convertible and capped)

Split-term: Combination of all possible terms (6 month through 10 years)

REPAYMENT OPTIONS

Whatever your financial situation and goals, I can help you identify the right mortgage for you. And at anytime during the mortgage term, a mortgage checkup will fine tune your strategy at any time.

PREPAYMENT OPTIONS: Many lenders allow you to make a lump sum payment — usually 10% to 20% of the original principal balance, per annum. In addition, many mortgage products now include a double-up and skip-a-payment feature. This lets you bank extra mortgage payments for a rainy day, at which time you can skip them if you need to.

PAYMENT CHANGES: Most mortgages now allow the amortization to be adjusted by increasing the payment on closed terms by 10% — 20% per year, once annually.

PAYMENT FREQUENCY: Most mortgages allow the option to pay your mortgage at a frequency that matches your cash flow — weekly, bi-weekly or semi-monthly. The added benefit of the accelerated weekly and bi-weekly payments is that by dividing a regular monthly payment into two or four respectively, and deducting it at the new interval, an extra payment a year is made directly against principal. The surprising effect of this one extra payment a year is to reduce the amortization of the average mortgage by approximately 5 years, with savings at the end of the mortgage term.

Closing Day

On closing, you will need to provide your lawyer with a certified cheque, made out to the lawyer, in trust to cover the downpayment, as well as any other closing costs. The
exact closing costs depend on where you live, how much you are borrowing, etc., and your lawyer will advise you of the exact amount required a day or two in advance.

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