Sensible strategies for today’s homebuyers and owners
Avoid rollovers. That’s when your mortgage comes up for renewal and you just roll it over with your current lender. If you are auto-renewed, the difference can be hundreds of dollars a month. At renewal, take a moment to shop around, and make every last dollar count.
Polish your credit. A low credit score can prevent you from getting the lowest mortgage rate. That’s why it’s so important to have good credit behaviours, like paying your bills on time. Don’t let your credit accounts exceed 50 per cent of the credit available. Before you cancel any credit cards, get advice. And don’t apply for a store card just to save on your purchase that day!
Consolidate to drive down debt. If you are carrying a large amount of high-interest debt outside your mortgage, this may be the time to roll that debt into a low-rate mortgage. This one, smart strategy could save you thousands in interest payments and boost your monthly cash flow.
Subscribe to rate updates. This will allow you to stay on top of any shifts in the market – and respond quickly.
Get ready now for higher rates. No one can predict when rates will start to rise. If you are buying or renewing now, consider what rates and your mortgage payment might be when you renew. If you can, set your payment up to that higher amount; you’ll avoid payment shock down the road, and pay your mortgage off faster!
Speed up your mortgage pay-down. Take every opportunity to beat down your mortgage principal. Build a plan to take advantage of your lender’s prepayment privileges! Consider changing from monthly payments to weekly or bi-weekly payments.
Reno and roll. The right renovation might be all it takes to turn the house you’re in into the home of your dreams. It may be an option to roll large renovation costs into your mortgage.
Get flexibility with a re-advanceable mortgage. This is a brilliant mortgage concept for those who want to pay down their mortgage – but still have flexibility in case it’s needed later. With re-advanceable mortgages, you can access your equity should an emergency crop up or an unexpected investment opportunity arise.
Sherry Jenkins is a mortgage consultant, AMP with We Mortgage.