When shopping for a mortgage it’s hard to get “low rates” out of your head. Of course, you would like the lowest rate you can get, but focusing solely on one aspect of your mortgage is a common mistake many people make. Many mortgages with low rates often have a catch, knowing what to look for can save you a ton of money in the long run. Rather than focusing entirely on low rates, take a look at things such as pre-payment privileges and mortgage portability to really save you money on your mortgage.
Pre-payment privileges allow you to pay a certain amount of money toward your mortgage on top of your current monthly payment without having to pay a pre-payment charge. These payments can be in the form of lump sums or increased monthly payments. Having this option will allow you to pay down your principal mortgage amount, the lower your principal is the lower your interest will be.
Mortgage portability allows you to transfer your mortgage over to a new property without having to pay a penalty. The benefit of this option is the ability to lock into a low interest rate by carrying over the exact terms you currently have on your mortgage.
Knowing what to look for in your commitment can help you negotiate, allowing more flexibility throughout your term. Have a strategy and know the conditions of your mortgage to get the most out of your money.