o you believe it is a good But in certain cases, it is a
idea to have a longer good idea:
amortization mortgage, say
25, 30 or even 35 years? • Future income
There are mortgages now available many people are just about
that permit mortgage brokers to certain of receiving a
find a mortgage that is even more significant increase in their
personalized than ever. A new future income, but they just
type of mortgage (prêt haven’t received it yet. For
hypothecaire) has been available example:
since the spring of 2006 that
allows a longer repayment period - a spouse is in school, but will
of up to 35 years. be finished soon
- a salary is based, according to
You may feel skeptical about a collective bargaining
taking out a longer amortized agreement, on years of service
mortgage - prêt hypothécaire. It - the income of a self employed
may not be the best idea for individual has not yet appeared
everyone. in his tax returns
You feel you’d rather not pay off • You want payment flexibility. -
your mortgage as slowly as There are those who receive a
possible, and therefore raise weekly paycheck that does not
your interest payments on the stay the same from week to week,
mortgage, but to manage the but one that changes. In such
payments to your best advantage. cases, they will want to keep
In most cases, people prefer a 15 their mortgage payments low for
to 20 year schedule. the periods when there is not a
great deal of income. Examples of
this would be people who work on 25 or 35 year mortgage note does
commission, seasonal workers or not really mean that you have to
the self employed. (prêt pay the mortgage for 25 or 35
hypothecaire) years. The document you sign is
not what fixes the payoff term,
• Rental property may influence but the amount and number of
how you want to repay the payments you make on the
mortgage. By keeping the rental mortgage.
income up (mortgage payments
down) because your income is tax Therefore, if you can make early
deductible, you can reinvest the payments, you can lessen the
proceeds instead of increasing period of amortization of the
the equity in the rental loan.
property. Lenders will permit you to make
prepayments of your loan, within
You can actually shorten the certain limitations. This allows
paydown period of a home loan - you to increase the amount of
hypothèque. payments you make on your home
loan whenever you can. This can
If you are afraid of being be done in two ways:
committed to a 25 or 35 year
mortgage, you can pay it off 1. Make an increased monthly
earlier (you can do this with a payment. Lenders will allow you
15 year mortgage as well). to pay a larger amount on your
mortgage by 20% per year and not
There are many strategies that we be penalized.
introduce our clients to that
allow them to pay down their 2. Pay down on the principal.
mortgages earlier than the actual Many, if not most lenders will
amortization maturity. Signing a permit you to designate a certain
additional part of your monthly by $200 per month ($1,253.18 per
payment as a principal payment, month). If he does not alter his
again, for up to 20% per year. payments any more, he will have
finished paying off his home in
An actual example 22.4 years from that date, or a
total of 24.4 years.
Mr. A will complete his Master’s
Degree in 9 months, which will There you are, mission
increase his teaching salary. He accomplished!lower payments when
decides to buy a house and he he needed them!
needs a $200,000 mortgage. The
payments on a 25 year mortgage Conclusion
(at 5.4%) are $1,209.17 per month
and on a 35 year mortgage are Extended periods of amortization
$1,053.18 per month. He opts for are not for every borrower, but
the 35 year mortgage - prêt are marvelous mortgage
hypothecaire. (hypotheque) tools that we can
use to personalize a mortgage
Two years later, his income has strategy just for your needs.
increased by 20% and he decides
to increase his mortgage payment
About the Author:
Gregory van Duyse is a writer for infohypothecaire.com - taux hypothécaire on mortgage calculators - taux hypothecaire
Read more articles by:
Gregory Van Duyse
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