Mortgage Blog
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Why it is Important to Check the Fine Print Behind No Frills, Discounted Mortgages
December 1, 2023 | Posted by: Bailey Simner
We are witnessing a surge in low-rate, no-frills mortgage promotions that may catch your eye, but it's crucial to scrutinize the fine print. These mortgages, while attention-grabbing, often come with limitations that may prove costly in the long term. Here's why it's essential to delve into the details:
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Opting for a fully closed mortgage ties you to the lender until you sell your house, limiting your options and eliminating negotiating power if your circumstances change within the next 5 years.
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Low or no prepayments mean you have little or no ability to make extra payments towards your principal, hindering your ability to reduce the overall cost.
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A maximum 25-year amortization may restrict your flexibility. Choosing a longer amortization period, such as 30 years, but setting your payments higher based on a 25-year or lower amortization, can be valuable. This approach leaves room to decrease payments later if needed for emergencies or special circumstances.
The future is uncertain, and the lack of flexibility associated with a no-frills mortgage could lead to significant challenges down the road.
Consult with us to explore all your options. We have access to numerous low-rate, full-feature mortgages that offer greater flexibility and could potentially save you thousands. Remember, the interest rate is just one factor to consider when choosing a mortgage!
YOUR MORTGAGE BEGINS HERE
Bailey Simner
Mortgage Professional
204-346--2357
bailey@simnermortgages.ca
