There are many things within a mortgage that give you different options in how you are able to payout your mortgage and one of those is the Prepayment Privilege. When you take a fixed term in your mortgage you are set with a payment based on the amount of your mortgage, the interest rate and the amortization time set. Further to that most lenders will allow you to payout over and above the required principal and interest payment without incurring a payout penalty. Those amounts will be based on a certain percentage of the mortgage amount which is usually in the 15%-20% range depending on the lender and the type of mortgage product you agreed to and signed for. Also, the privilege is usually two fold in that it can be a lump sum each year and also an increase to your required payment. The first is based in most cases on the original mortgage amount and can be done throughout the year with minimum amounts allowed each time. The increase in your payment can be set up to the allowed percentage as well and can be less than but no more than the percent allowed.
Note , these extras you pay go directly onto your principal amount owing on your mortgage and can be huge in how fast your mortgage is paid off and therefore the amount of interest paid. Advance Mortgage Brokers in Red Deer have over 30 years experience in the mortgage industry and can assist in explaining how having a flexible mortgage can better equip you with knowledge that will assist you in paying your mortgage quicker. We specialize in first time home buyers, second mortgages, acreage financing, home equity lines of credit, renewals , refinances and much much more. Advance Mortgage is a Mortgage Brokerage in Red Deer and area
