So, you want to own or buy a Rental Property? Join Upper Edge Property Management where, in the next installment of this Guide to Real Estate Wealth, Garret Wong continues his explanation of mortgages.

Interest penalty – is a prepayment penalty paid to the mortgage holder if you pay off the mortgage early

A fixed rate – the interest rate and payment you make each month will stay the same. A variable rate is when the interest rate will change with the prime lending rate as set by your lender. Typically, fixed rates are higher, because the lenders want to ensure they make their money over the long term, if interest rates start to rise.

So which is better? Your choice can come down to 3 questions:

(1) Can you sleep calmly at night, knowing the risks involved with a variable rate?

(2) Can your cashflow budget handle a 3 to 4 percent increase in your mortgage rate if prime climbs dramatically?

(3) Do you plan to sell your property within three years or want a faster way to pay down your mortgage?

Upper Edge Property Management, located in Winnipeg, Manitoba, Canada, has been successfully managing rental property for their investors since 1999, and chooses to specialize in the management of single family homes, condominiums and smaller multiplex buildings and apartment blocks.

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