Mortgage - Larger Than Life

That a mortgage loan is larger than life is a sentiment common to most people.  Why?  For a number of reasons:  it takes forever to pay off, the interest rates are financially cumbersome, and mortgage payments take the lion’s share of the family budget.

Mortgage:  always negotiable

No matter how heavy a mortgage may seem, even when husband and wife both pitch in for the monthly amortization payments, a mortgage is never fixed in stone.  It is a financial product that bankers and other financial lenders would be pleased to re-negotiate, especially if individuals have a financial crisis such as prohibitive divorce settlements after a break-up in the marriage.

When it makes sense to re-negotiate a mortgage, do so.  Those few hundred dollars you save monthly can make a difference if you calculate them over a 25-year period.  One of the best times to re-negotiate a mortgage is when there is the possibility of obtaining the lowest mortgage rate – like what happened in the recent housing boom.  Interest rates were at their lowest and money was cheap.  If it means having to put in another mortgage application with another financial institution, then do so.  Remember to hone those negotiation skills so you can obtain the best package to your advantage.

Mortgage:  how about a fixed mortgage?

If your present mortgage is an open mortgage and you estimate that interest rates will soon rise so that a fixed mortgage might be more advantageous for you, then get your hands on a mortgage rate calculator and compare terms and interest; see if some substantial savings can be made by switching to a fixed mortgage.

There are many web sites that feature a free mortgage calculator which anyone can use; they are usually reliable and accurate calculators, give or take a few differences in points.  At any rate, it is your financial institution that will do the final calculations when it’s time to sign the loan application.  The rates on those free mortgage calculators are ballpark figures, intended to give you an idea of what you may be paying in terms of interest and how much money you’ll have to set aside each month for your mortgage payments.

Hopefully, you’ve done your research on the piece of property that you’re thinking of taking out a mortgage on.  You don’t want to be saddled with a property that will depreciate when urban re-zoning laws are enforced by the city government.  You will want to ensure that your investment will grow and not go down in value.

After all, like we said, a mortgage is larger than life!