It is always important to read the fine print before you sign up for a home mortgage. If you do not follow it you can end up paying penalties. These penalties can be quite harsh and you might have to pay a huge price.
Here is what you can do to avoid that.
Property Manager MA: Understand Your Mortgage Terms
Borrowers often fail to look at the fine print of their mortgages because of the language used there. The fine print mentions affordable means of refinancing or exiting to obtain a lower rate with another lender. There may be times when it is worth paying a penalty just so you can ditch your lender and move to a competitor. This is why it helps to go over the fine print.
Research The Lenders
It helps to do your research about lenders besides reading up on the fine print. Make sure you borrow from a mono-line lender, as they only charge half of the penalty of other lenders. They can afford to do that since they use lower interest rates. So make sure you have a list of all the penalties, so that you can see which one is suitable. It is always good to be prepared for the future.
Property Manager MA: Term Length
If you believe that your circumstances will be different in a couple of years, sign a short term mortgage agreement. This means that you will have good rates for 2 to 3 years This also ensures that you will not have to suffer harsh mortgage penalties. The only catch is that you won’t get to secure your interest rate.
Borrowers can also go for a variable mortgage. It is not easy to meet the requirements of a variable mortgage but it is quite worth it. The penalties are not so harsh as a traditional mortgage. The downside is that the risks are slightly higher as the interest rates aren’t stable. The good point is that you can convert it to a fixed interest rate.
Collateral Charge Mortgages
Stay far away from a collateral mortgage if you want to avoid extra expenses. The extra expenses will occur if you want to refinance, transfer or change the mortgage when it hits maturity. Plus it will cost you a couple of thousand dollars to hire an attorney. Not only that but the firm will not give you a good rare when it is renewal time.
Property Manager MA: Consult With An Attorney
It is a good idea to ask your lender about all your options. You will also be able to refinance with them and they can waive the penalties if you have been a loyal customer. Do make sure you also clarify everything with them so that there are no issues. Consult your attorney to help you understand the cryptic terms of the contract.
Fortunately the Department of Finance has made sure that lenders toe the line by using plain and clear English to describe mortgage penalty charges.