Mortgage payments are typically the largest “monthly bill” that the average person has. But can you imagine what it would be like to be mortgage free? What would you do with that money you are now saving? Take more vacations? Invest in a business? Give more to your favourite charitable causes?
The good news is that there are strategies you can use to pay off your mortgage faster. In this article, we are going to discuss three of them.
1. Set up bi-weekly payments
Most lenders will allow you to pay bi-weekly on your mortgage rather than monthly. This means that instead of making 12 full payments a year you’ll be making 26 half payments (the equivalent of 13 full payments). It may not seem like much at first but it can make a big different in how quickly you pay down you principal.
2. Make additional payments
Before using this strategy you will need to check with your lender to see what their policy is for extra payments. Some lenders will allow you to make extra payments up to a certain amount or only at certain times of year without imposing penalties on you. Even if you can’t afford an extra full payment, you’ll be surprised at how quickly smaller amounts like even $50 here and there can add up.
If you are able to use the strategy of making extra payments, be sure to let the lender know that you intend for the payment to be put on your principal and not toward the following month’s mortgage payment.
3. See your mortgage broker before your renewal date
When mortgage renewal time rolls around, you will likely get a notice from your lender asking you to renew at a set rate. The problem with renewing right away is that a lender will very rarely offer their best rate in your renewal notice. It pays to shop around, and the best way to shop around is to talk to your mortgage broker who has connections with dozens of lenders.
Even if you end up renewing with your current lender, chances are that by taking the time to meet with your mortgage broker, you will get a better rate than you would have on your own. And by negotiating the best rate possible, you will be able to pay down your mortgage more quickly.
If you would like more strategies on how you can pay off your mortgage faster, contact Akal Mortgages today.
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