Just imagine – as you’re going through your favourite coffee drive-thru this week – that a well-dressed gentleman stops and offers you $11,000 for your medium double double. Who would hesitate? We’d take the cash. It’s not so far-fetched. In fact, if you take that coffee budget and apply it to your monthly mortgage payment – a mere $30 extra per month -you could save yourself about $11,000 over the life of your mortgage.
Most of us can accept the idea that we must borrow money to purchase a home. But with good planning – and a few smart tactics – you should be able to enjoy your mortgage-burning party much earlier. Here are a few strategies for fast-tracking your mortgage:
Consider putting some fast-track tactics in place. You’ll remember what a good decision you
made at your mortgage-burning party.
1. Increase your monthly payments as allowed by your mortgage. A $125,000 mortgage demands an $800/month payment (at 6% interest). But a payment of $1,000 can shave 8.75 years and almost $46,000 off the total interest cost.
2. If you are in a variable rate mortgage, take advantage of lower rates by maintaining your original payment.
3. Tie mortgage payments to your pay schedule. If you accelerate your payments to biweekly instead of monthly, you could improve your own cash flow and fit in an extra payment each year. That means that you’re paying off principal faster – leaving you with
less interest to pay overall. It doesn’t seem like much but – like putting your coffee budget to work – the bi-weekly strategy can have you mortgage free four years sooner, with almost $22,000 in savings.
4. Use any bonuses, tax refunds or “found money” to pay down principal. This is especially valuable in the early years of your mortgage. If you receive an annual bonus or other lump-sum compensation, see if you can put it against the principal.
5. Consolidate your loans into a new mortgage. You may be able to use your mortgage to consolidate high interest credit cards and other loans. Add the money you’ve been spending on loan payments to your mortgage payments, and you could see big savings in
overall interest.
Consider putting some fast-track tactics in place. You’ll remember what a good decision you made at your mortgage-burning party. Courtesy of,
Mark Fidgett
"Your Mortgage Consultant....For Life!"
PS - Please don't forget, the life blood of my business is your referrals. Who do you know that is in need of a great lender! Please give me a call. As always, I promise to deliver such great service that your clients will thank YOU for referring them to me.
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An independent broker associated with the VERICO Mortgage Brokers Network and a member of the Canadian Institute of Mortgage Brokers and Lenders. Copyright NotaPennyDown.com 2006. All rights reserved.
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