Open Vs Closed Mortgages

Closed Mortgage Advantages

Closed mortgage advantages fall right in line with the interest rates they offer. The rates are fixed, which means homeowners know right away what they will pay monthly and over the life of their loan, and there will never be a change in their rate no matter what happens. Homeowners who want to know they are paying the same rate for the life of a loan love the attractiveness of a closed mortgage. Anyone settling down into their forever home will find this is the best type of mortgage for their family. Couples looking to buy a home and pay it off before they retire, families looking to raise their children in a home, and those who know they’ve found their forever home should opt for a closed mortgage to save money and live more comfortably. In some cases, lenders allow buyers to double their monthly payments without penalties if they choose a closed mortgage and wish to pay it off at an accelerated rate.

Once again, however, there can be some disadvantages. Keep reading to reveal and understand what these are and when they occur.