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AMORTIZATION OPTIONS

Becoming mortgage free faster is usually the most sought after option by home buyers.
A registered
Mortgage Professional, Mortgage Broker or
Bank Specialist
can show you how

HOW TO GET A MORTGAGE

A registered
Mortgage Professional, Mortgage Broker or
Bank Specialist
can show you how
you can become
Mortgage Free Faster
with Pre-Payment and
Doubling Up
Monthly Payments


SHORTEN THE AMORTIZATION PERIOD

One typical way of doing that is to shorten your Amortization period of a mortgage which is easily described as "the number of years it will take for you to pay off the principal amount borrowed from a lender, plus the interest it accrues based on the current payment amount plus interest rate. Of course, if you shorten the amortization period you will have higher monthly mortgage payments, but you will pay significantly less interest over time.
Letís say, on a mortgage of $100,000 at 6% amortized over 25 years and you changed the amortization time to 20 years. The result would be a savings of about $21,000.

MAKE BI-WEEKLY PAYMENTS
Ask if you can adjust your payments from monthly to biweekly on that same $100,000 mortgage. At 6% interest rate you could save up to about $600 alone in
interest costs over a five year term.

PREPAY ON THE PRINCIPAL
Ask if you can prepay up to 15% of the original principal amount of your mortgage without penalty each calendar year in amounts as low as $100. For instance, on a $100,000 mortgage at 6% interest, amortized over 25 years you make a 2% lump sum payment each calendar year for five years. Beginning on the anniversary of your mortgage you would save about $1,300 in interest costs alone over the five year term.

DOUBLE YOUR PAYMENTS
Ask also if you can double up on your payments. Here is an opportunity to reduce your mortgage significantly. As an example, you would increase your payments once each calendar year to a maximum of 100% over the term of your mortgage.
Make sure to ask your lender if you can have the flexibility to choose to lower the payments back to their original level during the same term. Typically then, on a $100,000 mortgage at 6%, amortized over 25 years with a 10% increase in monthly payments at the beginning of the term would save you over $600 in interest costs over a five year term.

A Mortgage Professional, Mortgage Broker or Bank Specialist in your area can usually provide you with a Bank or reputable Lender who have great Rates and Terms.
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