Check the fine print behind discounted no-frills mortgages
Spring market 2012 is heating up with some low-rate no-frills mortgage promotions. They are certainly attention getting but these mortgages often come with restrictions that can cost you in the long run. That's why it's important to check the fine print:
- A fully closed mortgage means you're not leaving the lender unless you sell your house, so your options are limited and you have no negotiating power if your needs change in the next 5 years.
- Low or no prepayments gives you no or limited ability to chip away at your principal to reduce your overall cost.
- Maximum 25-year amortization can take away important flexibility like taking a 30-year amortization but setting your payments higher using a 25-year or lower amortization, which keeps open the possibility of reducing payments later should you need breathing room for an emergency situation or special need.
Who really knows what life might be like a few years down the road? The lack of flexibility associated with a no-frills mortgage could end up causing you some major headaches.
Talk to us to review all of your options. We have access to many low-rate full-feature mortgages that provide more flexibility and could save you thousands. Rate is not the one and only factor in choosing a mortgage!