There’s one good thing about a recession: it forces us to rediscover the virtues of a solid family budget. For some reason, the first budget items to be scrutinized tend to be the little luxuries: outings, treats… But we shouldn’t forget the item that, for most families, constitutes the number one expense: the mortgage.
Here are seven tips for managing your mortgage better.
Set the right goal
Not all households have been put in the same position by the current economic climate. For some, the situation is touch and go. Others aren’t on such shaky ground, but still want to be prepared for any eventuality. Unfortunately, giving yourself some short-term breathing room by reducing your mortgage payments also means signing up for a longer repayment period, which entails higher costs in the end. It’s important to be clear about your ability to pay in the short term so you don’t sacrifice your long-term security: do you really need to reduce your monthly payments?
Reconsider your amortization
If you do need to lower your monthly payments, you can ask your financial institution to lengthen your mortgage amortization period. For instance, if you’ve borrowed $150,000 and your amortization period is 15 years, you can reduce your monthly payments by $300 simply by increasing the amortization to 25 years. Be careful, though! As soon as your financial situation allows, reverse this change: shorten your amortization period to reduce the long-term cost of your loan.
Amortization: a balancing act
$150,000 mortgage at 5.75%
| Amortization | Monthly payment | Interest cost |
| 30 years | $ 869 | $ 162,811 |
| 25 years | $ 938 | $ 131.259 |
| 15 years | $ 1,240 | $ 73,232 |
If you have questions about mortgage, call mortgage agent Alex Malkhassiants at (416) 723-9383
You can find more information here - http://www.torontogreathomes.com/
Toronto real estate. GIVE YOUR MORTGAGE A SPRING CLEANING
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Reviewed by citra
Published :
Rating : 4.5
Published :
Rating : 4.5