Friday, 10 July 2015

Super Low Rate = Super Low Features

"Wow! That's an awesome low rate, I'll take it!" - Everybody, Everywhere.

If it sounds too good to be true, it probably is... This is the mantra one should live by when shopping for the best mortgage available. The lowest rate is not always the best option for everyone as that low rate almost always includes some restrictions and penalties that may not be in your best interest.

Deeply discounted mortgage rates are discounted for a reason. Like any purchase, when something comes at a much lower price than comparable goods, it usually means something is wrong with it. In the case of your mortgage, that something could cost you thousands of dollars in no time.

The Dilemma

Take the lowest rate and deal with the consequences? Or plan ahead and know what you are getting into?

The promotional low rates offered by today's lenders come with a myriad of drawbacks, exclusions, and limitations that can hinder your ability to change your mortgage or even to sell your home or move later as your life changes.

Some of the fine print with these products can include large prepayment or early payout penalties, a lack of prepayment privileges, and some are even 'fully closed', meaning you must sell your home to be able to break your mortgage term. Others may limit your ability to 'port' your mortgage to another property or increase your mortgage amount later, effectively locking you into the property you are purchasing or refinancing today.

Is it worth it?

For a small number of borrowers, these products may be a good fit. With the unique options available, it's important to have a second look by a mortgage advisor who can offer you all the alternatives so that you are making an informed decision today. Basing your mortgage choice solely on rate my save you some money in interest, but you can wind up paying far more than that in fees later. Always understand the 'fine print' when making your final decision, and be sure to ask plenty of questions about what, if any, restrictions apply to the product you are choosing.

Do you have questions about your mortgage? I'm always available for a free consultation to discuss your options and to help you understand the details and terms of your particular mortgage product.

Whether you got your mortgage from your bank or a mortgage broker, there is never a bad time for a review! Contact Ryan Today

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