What is Christian Mortgage?
So, you have decided to purchase a home. This means that unless you have enough cash to purchase the property outright, you will likely need a mortgage. Like all loans, a mortgage is just a specialized form of loan that allows for a long amortization, number of years you may take to pay the money back. In today's financial institutions, and with the increase cost of building and buying, the amortization period can range anywhere from five years to thirty-five years, and can have many terms and repayment options.
The next question you have to answer once you understand how interest rates work is whether you want an closed, convertible, or open mortgage. A closed term mortgage is usually the better choice for most people, especially if you are planning to pay it off in a shorter period. This method allows for a lower interest rate and the ability to pay off your mortgage prior to the end of its term.
A convertible mortgage provides the same benefits as a closed mortgage, but can be a longer, closed term, anytime, without penalties and additional charges.
An open term mortgage can be paid out at anytime without penalties, but usually the interest rates for this type of mortgage are higher. With this type of mortgage, you can convert to closed or convertible mortgages without charges.
Today's mortgages also allow for a flexibility of prepayment options including monthly, semi-monthly, bi-weekly or weekly with monthly taking the longest to pay out and weekly taking the shortest payout as far as interest is concerned.
Also, closed and convertible mortgages open when the current term expires with most financial institutes allowing you to pay up to an additional 10% down against your mortgage.
If you have a little extra money each month, bank it, collect interest on it, and then use it to pay down your mortgage a little quicker. It is always nicer to have the deed to your home in your hands a little sooner.