Finding the right mortgage is a little more difficult than many buyers realize, as it's more than accepting the first mortgage offered. It’s about finding a mortgage with great terms, a low-interest rate, and the least expensive way to pay off a house as quickly as possible. Owning a home is a dream come true for many individuals, as it makes them feel they’ve finally made it, which is a beautiful feeling. However, finding the right mortgage can make the feeling even better when it’s a good fit for the family. Here’s what everyone needs to know if they’re comparing open and closed mortgages.
Open Mortgage Advantages
The open mortgage advantages are numerous, but the biggest advantage associated with this type of mortgage is the simple act of being able to pay off a mortgage as early as possible without paying any early payoff fees. Open mortgages are quite popular, if for no other reason than just the sheer flexibility of payment options. It’s possible to move the mortgage to a different type if a homeowner finds a lower rate elsewhere, and it’s easy to pay it off if they have the funds available. The advantage is not only being able to pay it off early if making bigger payments, but also being able to pay it off with a new loan if there is one available with a lower rate, if the home sells, or if something else occurs to enable the owner to pay it off. There are no early payment penalties, which is a big plus for any loan.
Of course, there are some disadvantages. Continue reading for details on these.