The right mortgage product is more crucial than rate!

Zoltan PadarUncategorized0 Comments

mortgage matters

The importance of choosing the right mortgage features, and it is more important sometimes than the rate of your mortgage! A common mistake some mortgage shoppers make is focusing entirely on getting the lowest rate.
Don’t get me wrong, a low rate is significant, of course, and that’s my goal too. But there are other considerations when looking at a mortgage product: its features. Think of shopping for a mortgage, like shopping for a new vehicle. Ultimately, you want to balance the best price you can find with the features that make the most sense based on your personal likening.
Similarly, finding the ‘best’ mortgage typically involves securing the most competitive interest rate for the product that offers features that are most important to you. Those features could provide crucial flexibility when you need it most. In some cases, they may even save you a lot more money.

Let’s take a look at some of the critical mortgage features you should watch for:

Prepayment privilege

It can increase your monthly payments or make lump-sum payments throughout the year. If you want the flexibility to become mortgage-free more quickly, look for a product with great prepayment privileges.

Rate hold

Some of the lowest rates on the market are advertised as “quick close” specials since they’re only guaranteed for as little as 30 days from the time you start your application, and only if it’s a live deal. If you need the flexibility of more time, opt for a mortgage with a 90- or 120-day rate hold.

Portability

This allows you to “port,” or move, your existing mortgage from one property to another should you need to sell and buy a new home during your mortgage term. In addition, porting the mortgage could save you the cost of paying a prepayment penalty if you otherwise had to break your mortgage.

A secured line of credit

For some, having a secured line of credit, or Home Equity Line of Credit (HELOC), included in your mortgage is essential as it gives you access to up to 65% of your home equity. It’s also generally much cheaper than an unsecured line of credit. A line of credit could prove incredibly valuable if you have potential renovations or investment opportunities.

Skip-a-payment

This option can give you additional flexibility should you experience an unexpected life event and need to skip the occasional mortgage payment. Products vary by lender, but many generally allow up to one missed payment per calendar year.

Cash-back

Do you need some extra cash right after your purchase closes? This feature gives you back a percentage of the total mortgage amount as cash, which can be used to furnish your new home, complete a needed renovation, cover legal fees, etc. Of course, the amount is amortized into the mortgage, so just be aware that you’ll be paying interest on that cash.

These are just some of the many mortgage features to consider and some of their nuances. Give us a call today 403-253-2022 for a more detailed discussion about your specific needs and how some of these features could benefit you! Also take advantage on our FREE Consultation session with one of us, we have many years of experience in difficult situation.

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