When, Why, and How to Get Mortgage Debt Off Your Plate
There is no better feeling than knowing your family is all under one roof.
(And yes, that even includes the arguments and fights!)
Togetherness is measured both by the people closest to you and by how secure you feel at home.
In all likelihood, if you’ve got a family, you’ve spent some time thinking about home ownership. And rightly so! Nearly everyone who has a family wants to own their own home.
It goes without saying that there’s a certain amount of personal security and peace of mind that come with home ownership. It’s a huge step in life, and a significant rite of passage for anyone trying to build a full, rich life.
That being said, it’s one thing to buy a home, and another thing entirely holding on to it.
Some people are focused entirely on paying down the mortgage faster. Others choose to spread it out over 20 to 40 years.
Mortgage payments, in addition to your other debts, expenses, and responsibilities, can create obstacles, new debts, and could end up costing you more than money. The absolute worst-case scenario is that these challenges could cost you your real estate.
If you’ve just started on the path to homeownership, or have just bought your first home, you might be tempted to jump in and pay your mortgage in half the time it takes the average homeowner.
Before you do, though, you should take a closer look at some of these insider tips. Paying off your mortgage faster isn’t a bad thing by any means—but it does take some careful planning!
Tips for New Buyers
Are you looking to buy your first home? It can be a lot to take in. That’s why these key strategies, based on experience and insight, are designed to help you navigate the buying process as a newcomer.
Start here if you’re looking to secure your home as quickly as your finances will allow!
- Have you got outstanding debts, such as a credit card balance or an amount owing on a personal line of credit? Pay these off before you start increasing payments on your mortgage! It’ll help give
- Don’t forget: mapping your own finances, keeping tabs on your budget, and learning about how to leverage debt or how mortgage points work is always helpful.
- Throw extra money at your mortgage! Whether you make tips, earned a bonus, received vacation pay or a tax return, or just found some cash in a winter coat, always throw your extra income onto your mortgage and make Future You happy.
Why Pay Off Your Mortgage Sooner?
Chances are you’re already itching to pay your mortgage off. That’s normal! If you’re looking to get your mortgage off your plate faster, strategies that maximize your payments to clear your debt offer a variety of benefits.
Consider paying accelerated bi-weekly mortgage payments if you can swing it. However, you might want to consider making lump sum payments as opposed to increasing the mortgage payment. The end result is the same (paying off your mortgage faster), but you’re not locked into making increased payments on a regular basis. Many lenders let you pay between 10 and 20% of the original mortgage amount in annual lump sum payments. The only catch is you can’t surpass the threshold or limit set in your mortgage contract.
Watching your home debt disappear twice as fast results in a financial and emotional payoff… and more money in your pocket sooner rather than later.
Equity matters. Paying off your mortgage means other investment opportunities for your future. Many people take the amount of their usual mortgage payments and place that amount into investments or retirement once they have paid off their home. This means your lifestyle remains the same, but you become more solvent every year.
Finally, disposable income rules! Paying off your mortgage not only means you have equity to play with, it also means you have entered a new stage in life where things like nice vacations are no longer unaffordable. Enjoy your accomplishment, all the way to retirement.
Planning for Rental Properties? Read This!
If you plan on buying rental properties in the future, do not increase your mortgage payments. This will affect your future ability to qualify for a mortgage on another property. When in doubt, make the lump sum payments if you want to pay off your mortgage faster.
The Right Time to Find A Certified Mortgage Broker
If you are feeling overwhelmed or out of your element, it’s probably the time to consult with a mortgage broker. Mortgage financing provides a pillar of confidence and the drive to see your home investment through.
Sometimes, you need to overhaul things completely. Working with a broker can help you identify issues and problems with your mortgage. Refinancing is tough, but the right advice can get you back on the right path of complete homeownership.
Say financial situation has changed for the better. Now what? Well, now the strategy begins. You already have a lot on your plate, so leaving your mortgage-related decisions in the hands of professionals will not just maximize the potential of your situation but give you peace of mind as well.
Paying off your mortgage is not easy, and many people struggle to pay off their family home as years go by. But it doesn’t have to be that way. An accelerated payment plan to eliminate the balance owing on your family real estate will inject freedom into your life, and the lives of your loved ones.
After all, what is more important than your own sense of security?
Chris Allard’s experience in the field means he can get you offers with over 50 financial institutions lending in Ottawa. Every lender has many mortgage products they offer, which means Chris and his team will make sure a mortgage caters to your needs while also ensuring you get a competitive rate. Chris Allard is a proud mortgage broker of Smart Debt Mortgages, independently owned and operated. Smart Debt broker #12236.