With the many different mortgage plans out there, it can be difficult to find the one that fits you best. It doesn’t matter if it this pertains to fixed rate mortgages, variable mortgages, closed mortgages, or open mortgages. Super Brokers can help you find the right loan for your financial needs.
It is in discussion with our mortgage professionals that you can find the very best loan to fit your needs. Our team will sit down with you to understand what it is that you need most. We will work to get the loan that fits your financial needs to the utmost degree.
What is an Open Mortgage?
Open mortgages allow the borrower to pay down their mortgage as quickly as they want. This can be prior to the maturity date of the mortgage term. Even better, there are no pre-payment penalties involved.
Being able to pay the principle down as quickly as possible is of the utmost importance to some borrowers. Open mortgages allow for this, but there is definitely one thing to keep in mind. With open mortgages, there are normally higher interest rates than the other types of mortgages out there. For this reason, open mortgages are some of the least popular options out there.
The Advantages of Open Mortgages
Generally speaking, open mortgages can be quite beneficial for people with varying incoming, primarily those who are self-employed. If a self-employed individual gets an extra amount of money, like a bonus, it can be applied to the principal without any interest applied.
Another way in which open mortgages may be beneficial is if the borrower is expecting an increase in income in the future and plans to pay off the mortgage as quickly as possible. As mentioned previously, there are no pre-payment limits to be worried about.
When a borrower can pay down the principle in a shorter amount of time, they are then able to limit the amount of interest that they will have to pay on the life of the mortgage. Depending on how long it takes to pay off the principle, it can be a huge money-saver when it comes to interest.
The Disadvantages of Open Mortgages
Without question, the most detrimental thing about open mortgages is that they have higher interest rates. Those rates are at least a full point higher than a fixed or closed mortgage. This can be offset if the borrower plans to pay extra towards the principle in order to pay off the balance of the loan sooner.
For borrowers on a fixed budget and can’t make those additional payments, an open mortgage is probably not the best option for them. These are ideal if the borrower thinks that they will be able to pay off the principle of the loan in a far shorter time than the term of the loan.
Contact Super Brokers to Learn More
Open mortgages can no doubt be a great way to attain short-term financing. This is for buyers that plans on paying off the principle in a shorter time in order to cut down on interest payments.
For borrowers that plan on having a longer loan period, closed mortgages are probably better for those on a budget.
Contact Super Brokers today to talk to our mortgage professionals. They will work diligently to help find the very best loan for your needs. They will also be able to provide you with real examples of how an open mortgage would work for your budget and your life.
One call to us can be the push that you need to find the perfect mortgage to fit your needs. We can helping you land the home that you have been dreaming of.