The Pros and Cons of a Closed-End Mortgage

A closed-end mortgage is a type of mortgage that many lenders try to get customers to agree to. This type of mortgage can provide you with some benefits, but there are several drawbacks as well. Here are the pros and cons of a closed-end mortgage.

Pros

The biggest advantage of going with this type of mortgage is that you are going to be able to get a cheaper interest rate. Most of the time, lenders want you to get involved with this type of mortgage, so they will offer very competitive rates on this product. This can allow you to save some substantial amounts of money over the course of the loan term. Another advantage of this product is that you are going to be able to get a lower monthly mortgage payment because of the savings.

Cons

With this type of mortgage, you are not going to be able to pay off your mortgage early. You will have to wait until the loan has matured before you will be able to pay it off. Another disadvantage to this type of loan is that you will have to get permission from your lender before you can get a home-equity loan or some other type of loan.

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