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Closed Mortgage

(1 to 5-year terms are most common but can go as high as 10+ years):These types of mortgages have structured repayment schedules with specific amounts due on a weekly or monthly basis. They usually have the lowest interest rate available but cannot be prepaid or discharged before the end of the term without having to pay a significant penalty. Ideal for purchasers who need to lock in their mortgage costs for long-term cash flow planning. While most closed mortgages have lower interest rates and...

CLOSED MORTGAGES / FIXED RATE MORTGAGES

The expression 'closed mortgage' originates from the 1980's when this type of mortgage was literally 'closed'. You contracted to the lender to make your payments for the term chosen, you could not pay anything additional, nor could you pay off the entire amount for any reason except the sale of your property. These days, there are many ways to pay down your mortgage principal quicker, though the name 'closed' mortgage still remains. See pre-payment options for ways to pay off your mortgage ...

Closed Mortgages

In a closed mortgage, the interest rate is locked in for the full term of the mortgage and you must pay compensation, known as pre-payment charges, to the mortgage lender to renegotiate the interest rate or pay off the balance prior to the end of the term. Closed mortgages are usually the better choice for buyers who suspect that interest rates may be on the rise and for those who are not pla...

Second Mortgages

Secondary financing obtained by a borrower. They can be fixed in amount or take the form of a Home Equity Line of Credit, which is simply a revolving credit line secured by a house.Homeowners use these forms of financing to consolidate bills, do home renovations, put their kids through college, etc. They are tapping into the equity they have in their house to use for other ...
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