 Sam
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Joined: 21 May 2005
Posts: 281
Location: CALIFORNIA
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 Posted: Wed Mar 31, 2004 5:47 pm Post subject: Should I consider a Convertible Mortgage? |
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Convertible Mortgage gives you the flexibility to use the mortgage according to your financial priorities. Let us then look into what the benefits of this mortgage are:
- The terms could be changed in two ways:
- Fixed to adjustable interest rates and vice versa
- Short term closed to long term closed.
- You could start off with an adjustable interest rate, which is low initially and then switch over to the fixed type.
- Thus one can avail of the benefits of both fixed and adjustable rates. Not only would you have to pay less with adjustable rates but you would win peace of mind with the fixed rates.
- You can keep a check on the rates of the day and thus convert your rate type.This way you are the winner both ways.
- The lenders will charge no conversion fees and the process is hassle-free. Upon renewal the terms are extremely flexible and you can keep pace with volatile rates in the market.
- The time limit for acceptance of the rate type need be predetermined which is usually 6 months or 2 years.
- The fixed payment over the long term increases your home purchasing power as well.
- The expense of refinancing is done away with, but you will not be able to use the built up equity of your home.
- A good gumption of the future would help those who want to opt for the fixed rate first and then shift to adjusted rates.
- No penalty need be paid for the switch in either direction.
- This is a closed mortgage and offers a lower rate than an open mortgage during the same term.
Such innovations in Mortgage types are to suit your financial needs and you are the best judge. |
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