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.