Tips to Help Homeowners To Save Big On Paying off Mortgage

Quite a number of Canadians tend to focus on the interest and how much they can save when it comes searching for a mortgage.

But that most of them fail to realize is that paying a few extra dollars every two weeks as an alternative to paying the usual monthly payment or perhaps making an additional lump sum payment annually can help mortgagors save thousands of dollars, as well as helping them reduce the period it take ti settle the mortgage.

Wade Stayzer, a vice-president of sales and service Meridian Credit Union advice homebuyer to have a full comprehension of what they can afford to pay and work from there.

“You really need to understand your personal financial situation and what it is you’re trying to accomplish,” said Stayzer.

The mortgage contract determined the rules governing if borrowers can increase payments, so it’s absolutely crucial to read the fine print before making any decisions.

Stayzer advice those who are hoping to pay off the mortgage faster and can afford it to increase regular payments by saving up and making lump payments yearly.

“We all know that we’ll find things to do with the money if it’s just sitting around waiting to do that,” he said.

Doing so will help you save thousands of dollars, as the equivalent of an extra monthly payment every year compared with 12 monthly payments. Also, interest costs will be shortened if you pay annually instead of monthly.

The additional payments will protect you in the event of future increases in mortgage payments.

The regional vice-president at the Bank of Montreal, Omar Abouzaher recommended that bonus gains from prospects such as increases in income can be used for the mortgage.

“If your kids are out of daycare or you get a promotion and you’re OK with your lifestyle, you’re OK with your cash flow, why not apply this extra money on your mortgage payments,” said Abouzaher

Another recommendation by Omar to use your income tax refund to help settle your mortgage payment.

“This lump sum goes directly toward the principal and not towards the interest, so will allow you to save a lot of money in terms of interest,” he said.

“What’s going to help you sleep at night,”.

“I know people who are really comfortable with mortgage debt and people that are saying ‘I can’t wait to get this thing paid off.” he added.