Paying Off Your Mortgage Faster - yes, it is easier than you think.
Everyone wants to pay off their mortgage faster. The original 25 or 35 year term you signed up for, is just a way to get you that first house. Once you get used to the payments, and know exactly what you can afford, you can then start planning just exactly how much more you can afford every month, and if possible, stick to it.
I'm sure there are many other ways to pay off your mortgage faster, but here is a short list:
1. Match your mortgage payments with your pay periods.
If you get paid every other week, pay your mortgage every other week. It takes years off the mortgage.
2. Shorten your amortization.
If you can budget for the higher monthly payments, this will help you build equity faster.
3. Use your pre-payment option.
Many people get a mortgage with this feature, but very few use it. This can add up to thousands of dollars.
4. Consider permanently increasing your payments, when you get a raise at work.
You probably won't feel it, and it can be paying your mortgage off much faster.
5. Most banks allow you to pay a lump sum in one calendar year, and if you don't use it, you lose it. This doesn't mean it has to be a huge amount. Any amount helps. Getting money back on your tax return? Put it into your mortgage (if you're not holding huge balances on your credit cards - pay those off first).
6. Some banks allow you to double up your payments or to increase your regular payment.
If your payment is $1129 per month, but you can pay $1200 every month (or $600 every other week), then do it. It will make a difference.
7. Shop around for better terms at renewal.
Don't just sign the form your bank sends you. They should be offering you great rates, which are competitive. Shop around and renew with someone who gives you what's best for you, with the flexibility you need and terms that are best for you, not the bank.
If you're shopping around with a mortgage broker, double check everything, before you sign.
Mortgage Brokers get paid by the banks. Some, however, will also charge YOU a fee.
SOME mortgage brokers will give your business to the bank who pays them the higher fee - and this is not always the lender who will give you the best deal, or the very best terms. You want to make absolute sure that what you are offered, is the best FOR YOU.
Some of my clients have not had good experiences with Mortgage Brokers, and once they are stuck with that mortgage, there is nothing we can do about it, as the penalties would be too great to switch, so just be careful what you sign. Make sure it's right for YOU.
(This doesn't mean all mortgage brokers are the same, just as all bankers are not the same ... )
If you need a second opinion, get one. If you need to discuss with your REALTOR before you sign on the dotted line, do so. You should definitely review the paperwork with someone you trust, before you commit.
Sylvie Conde, Broker - Your Toronto Realtor!
Sutton Group-Associates Realty Inc, Brokerage 416-966-0300
Independently Owned & Operated
sconde@sutton.com
www.sylvieconde.com
www.torontorealestatelife.com
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Toronto Real Estate and Life Blog ....
.... information on buying - selling - mortgages ... and all things Toronto and the GTA
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