Flexible Mortgages

Mortgages were once onerous things that bound the borrower to pay a certain amount to a bank each month, without fail. The word "mortgage" has its roots in the French language, and means "death guarantee." However, today's mortgages offer a degree of choice rarely seen 20 or even 10 years ago.
One of the most dynamic mortgage products available on the market today is the flexible mortgage.

Flexible mortgages give borrowers a high degree of choice as to when and how much they want to repay on their mortgage. With a flexible mortgage, you can make extra payments or skip payments if you need to. The flexible mortgage is perfect for those who make extra money at certain times of the year, because it gives the option to pay down your principal much more quickly than a regular mortgage. Self-employed people, people who may have to relocate unexpectedly, or seasonal employees will find a flexible mortgage extremely helpful, especially if they often experience periods of extremely high or low income.
There are many degrees of flexibility available in today's mortgages. For example, some mortgages will allow a lump sum payment of 10 percent or more every year, while others may allow you to skip the principal payment in any given month in order to save money to pay other bills. However, a truly flexible mortgage has the following characteristics:

• Interest calculated daily - Many mortgages have interest calculated annually, which means that you pay interest based on the previous year's balance. A mortgage that bases interest calculations on a day-to-day balance of the loan allows you to pay less interest, especially if you make a lump-sum payment.
• Complete lump-sum payment freedom - With a flexible mortgage, you can make a lump sum payment of any amount at any time without having to pay a penalty. This helps you pay off your mortgage faster and pay less interest.
• Take a break - A flexible mortgage rewards you for making extra payments by letting you take a few months from your mortgage payment.
• No fees - With a flexible mortgage you will not be charged a penalty if you decide to pay off all or part of your mortgage. You will also not be charged fees if you decide to re-mortgage your home to take advantage of a lower rate elsewhere
• Underpay - If you do not want to take a break completely, a flexible mortgage should allow you to pay less than your regular payment if you have made an overpayment in the past

• Borrow from yourself - If you do make a lump sum payment, you should be able to borrow it back at a later time. This allows you to put extra money on your mortgage to save interest when you have extra cash and still be able to feed yourself during leaner times.