Here's an article I read this morning http://bit.ly/9XevR0 that I can agree with as well as disagree.
The level of people taking amortizations longer than 25 years is a growing trend, however, a lot of my clients that I coach into the right mortgage will take a 35 year amortization.
They don't take it to make sure they have the lowest payment and buy more home (well some do). They take it as a strategy for any future possibility of needing any extra cash flow per month. Maybe a loss of a job, death in the family, whatever.
What I say is take the 35 year AM, however, keep your payments at the higher level which is based on a 25 year or less. If an unfortunate event happened and you need that extra few hundred dollars cash flow per month, simply call and have your payments brought down to that lowest level. (most clients are able to do this online)
It's a simple solution to needing cash flow at some point down the road that doesn't have you panicking as much. If you register your mortgage in a 25 year originally, then the only way to go out to 35 is to re-register which you may not qualify for as maybe you lost your job.
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On another note, if your mortgage is insured with CMHC, Genworth or CG, there is also the home owner assistance programs that may help. This is for those that need help in dire times. The insurer and lender would rather see you work out a deal to keep your home than see you go into foreclosure. Another reason why our foreclosure rates are so low. We care!
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