Mortgage Features to Know About

If you are ready to purchase a property, or you are simply refinancing an existing Mortgage, it is worth knowing that not all products have the same features and benefits, so doing some research ahead of time and speaking with a Mortgage Specialist should be a priority.

Below I've outlined some information on some common features to know, when you are refinancing or obtaining a Mortgage:

• Fixed or Variable?
• Open or Closed?
• Bi-weekly Payments or Monthly?

To get all the details, I sat down with Aly Azam , TD Mortgage Specialist to learn more, and here is what we discussed:

Fixed Vs Variable Rate Mortgage??

Generally, if you prefer stability and are concerned that interest rates could rise during your mortgage term, then a?fixed rate mortgage?is most likely the better option for you – especially if you are a first-time homebuyer. With a fixed interest rate mortgage, once you’ve selected your term, you can be assured your interest rate and mortgage payment won’t change for that period.??

With a?variable interest rate, your interest rate can fluctuate based on changes in our TD Mortgage Prime Rate but the amount of your principal and interest payments will stay the same.?If you're not comfortable with interest rate volatility, there is the option – subject to meeting certain conditions – for you to switch your variable rate mortgage to a fixed rate mortgage at the current rates in place at the time of the change. Term selected must be at a minimum the lesser of three years or the remaining period of the original term.??Variable interest rate mortgages are an option that works better for people who are more comfortable with a little unpredictability about the amount of their outstanding balance at renewal if interest rates go up during their mortgage term.

Read more from TD here .

Mortgage Payment options:

It's important to know what your payment options are as a Borrower. You should ask your lender if you have flexibility with the frequency of your payments, and if they allow additional payments as lump sums, or increased payments which would reduce your principal amount faster. Additionally, you will want to know if there is an option to slow down payments as this can help when needed.

1. Some Lenders (like TD) allow regular payments to be increased by up to 100% over the term without charge once per calendar year.
2. Some Lenders (like TD) provide the option to prepay up to 15% of the original principal amount on your mortgage once a year, without charge.
3. Payment Frequency: Weekly, Bi Weekly, Semi Monthly, Monthly, Rapid Weekly or Rapid Bi Weekly?

If you pay your Mortgage loan more frequently (bi-weekly instead of monthy) you can potentially reduce the overall amount of interest you pay on your loan as you will be paying the Mortgage principal faster.

Check out TDs flexible Mortgage Features here .

What’s the difference between an open mortgage and a closed mortgage?

With an?open mortgage, you can increase your payments by any amount, repay in full, refinance or renegotiate any time during the mortgage term without paying a prepayment charge.?

With a?closed mortgage?agreement, the mortgage amount cannot be prepaid, renegotiated or refinanced before maturity, except according to its terms vs. Open mortgage agreement in which the mortgage amount can be prepaid at any time, without requiring the payment of additional fees.

Check out TDs Mortgage Types here .

The above was just some things to get you thinking before you make a decision about a Mortgage. It is recommended you speak with a qualified financial professional to understand what will work best for your individual needs.

If you'd like to speak with Aly Azam , Mortgage Specialist, connect with her on LinkedIn or call her directly at 416-937-2005.