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3 Types of Mortgage

Mortgage types

If you want to obtain mortgage, it is very ideal that you are aware of the three types of mortgage. You have to make sure that you know the differences of these three mortgages. In choosing the best mortgage, asking the opinion of mortgage broker is necessary. Your broker can choose the best mortgage that is suited to your underlying needs.

 

Three Types of Mortgage

 

  • Closed Mortgage

This type of mortgage is very ideal for you most especially if you are looking for consistency with due respect to length and rates of the mortgage agreement. The interest rates are made lower however this type of mortgage is not offering flexibility in terms of paying off the mortgage down. It does not change the interest rate during the mortgage term.

 

  • Convertible Mortgage

This type of mortgage is flexible however it offers minimal risk. Convertible mortgage also offers low interest rate and it also provide greater opportunity for you to switch for long term closed mortgage that is free from penalties.

 

  • Open Mortgage

When talk about flexibility in paying off mortgage, you can choose this open mortgage. If you have decided to create lump payments or you want to pay off mortgage before the expiry date, penalties will not be incurred however, the flexibility it provides sometimes give high interest rate that results to higher payments every month.

 

Choosing the right type of mortgage will surely provide you with peace of mind. You can also obtain mortgage that is perhaps considered as the major financial commitment that you can ever have.

 

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