Buying a home and taking a mortgage, all these things can be thrilling and overwhelming at the same time. Though you are excited about moving into a new home, you are also overwhelmed by the thought of repaying the loan that you have taken for the home. Whenever you plan to take a mortgage you must negotiate the terms and conditions with your Mortgage broker Brampton. When you have taken a mortgage various repayment options are available to you.
Monthly Payment Plan: The amount you would be paying monthly is set by the mortgage terms and rates. In this type of payment option, you would be making 12 payments every year. Every month on the same date, the exact amount would be withdrawn from your bank account.
Bi-Weekly Payment plan: In this type of payment option you would making the payment every two weeks. The payment is calculated by multiplying the monthly payment amount by 12 and then dividing the amount by 26 weeks. This will be able to give you the amount that you would be paying as your bi-weekly payments.
Accelerated Bi-weekly payment plan: In the accelerated version, you are still required to pay 26 payments per year. The amount can be computed by dividing the monthly mortgage in half. This implies that you would be required to pay a higher amount with each payment.
Weekly Payment plan: This type of payment plan requires you to multiply your monthly mortgage payment by 12. Then this amount is spread over 52 weeks.
Accelerated Weekly Payment plan: This is the most aggressive payment option which is available. The monthly mortgage payment is divided by 4. You would be making 52 payments every year. What makes accelerated weekly payments aggressive is that the amount you would be paying would be a little higher each time around.
What is mortgage amortization?
Mortgage amortization is the time you take to pay off the mortgage. The options mentioned above determine the mortgage amortization. The longer the period, the lower your monthly payments would be. In a longer amortization period, you would be paying a higher interest rate.
What is a mortgage term?
A mortgage term is a period through which the agreement and interest rate holds. You can opt for a 20-year amortization mortgage with a mortgage period of 5 years. When the 5 years are over, you will have to renegotiate the contract and renew the mortgage.
Ask the experts
If you are unsure about which type of mortgage payment option would be best suited for you, it is always a great decision to discuss it with the experts. Share your financial condition with them, and they will help you to figure out the best payment option. They would be able to answer all your questions regarding the mortgage. It is only understandable to be overwhelmed through this process. Some sound advice by an expert can help you to be at ease through it.