We are not talking about paying your mortgage off. That is everyone’s goal.
Instead, we are going to discuss the high-interest rate mortgage and the cosigned mortgage.
Situation #1: The high-interest mortgage.
We have to realize that any rate above the bank prime rate is not that good. It would mean, in theory, that it takes you twice the amount of time to it pay off at a higher rate. Sometimes there is no principal at all due to interest-only payments.
When you enter into these types of mortgages at this high rate, you must have an exit strategy. The biggest question you should have is –
“When am I able to get into a better mortgage rate?”
At Mortgage Suite, this plan generally has a 3-year time frame. This means that we need to get you into a proper mortgage by this time. This proper mortgage usually tends to be B-Lending and can depend on what borrower type you are when trying to exit the private mortgage.
Situation #2: The cosigned mortgage.
It can easily be said that most times cosigners want to help, but this help also has a time limit attached. When we chat with a cosigner, we must communicate when they will be able to be removed. Unlike high-interest mortgages, this can happen within 3 to 5 years after.
It’s best to perform at renewal time. Ask your mortgage agent/broker as some lenders have what’s called a covenant change that they can perform. This would be the borrower requalifying and removing the cosigner from the mortgage. This is usually done in-house by the lender/bank.
Either way, both mortgage situations above require a plan. A thorough look out into the future. This is only done here at Mortgage Suite.
Our path to a better mortgage can help you now and in the future when changes are needed.
