As most of us are aware, mortgage is a homeowners biggest debt and mortgage payments come out from after-tax dollars. Paying off the mortgage early and being debt-free comes with a lot of sacrifices and is also not a viable option for many homeowners. There are other ways to control your debt and not waste your hard earned dollars.
Here are 10 suggestions to get your mortgage under control and minimize the amount of interest you are paying.
1. Accelerate the frequency of your payments. For example, if your intention is to pay your mortgage on a monthly basis, switch to bi-weekly payments and save on interest.
2. Make your anniversary payment count. Most financial institutions allow to make a payment on the anniversary date of the mortgage agreement up to a certain percentage, usually 10%-15% of the principal.
3. Round up your payments from let's say $950 to $1000 per month. This way you are paying down your mortgage faster with each payment.
4. Use a mortgage broker to find the best deal or alternatively check websites such as www.ratehub.ca Mortgages can vary with rates and conditions so be sure to consult professionals.
5. Beware of mortgage penalties.
6. Keep payments the same even if interest rates have fallen so that you can pay off the principal faster.
7. Stay on top of new regulations and changes, especially changes to the interest rate.
8. Whenever possible use the prepayment option and pay down a substantial amount of your mortgage.
9. Shorten your amortization period. If your mortgage is amortized over 25 years, switch to a 20 year amortization. This way you will be debt free 5 years earlier.
10. Downsize. This may be a radical step but if you seriously consider being debt free, consider selling your larger home and using the profit to buy a smaller home.
Eva Ivach | Sales Representative
CENTURY 21 Miller Real Estate Ltd.
Top 5 Office in Canada - TOP 10 Firm in Canada
By Production for CENTURY 21 Canada 2014
Brokerage, Independently Owned and Operated
467 Speers Rd
Oakville, ON L6K 3S4
Office: 905.845.9180 | Fax: 905.845.7674