4 Ways to Become Mortgage Free and Pay-off Your Mortgage Faster

For most people, a mortgage is the largest financial obligation they’ll ever have in life. Unfortunately, that means it’s probably also the longest. When you buy a home in your 20’s, you can look forward to paying it off perhaps in your 40’s - perhaps longer if you upgrade your home and renegotiate a higher mortgage. However, there are ways to pay off your mortgage faster, allowing you to attain that coveted “mortgage free” status sooner than you realize.

Here are 4 mortgage-free-sooner strategies by Mortgage Broker in Vancouver:

Ways to Pay Off Your Mortgage Faster #1:

Increase Your Payments

When you set up your mortgage payment, you’re told what the payment amount will be. This isn’t the only payment amount you can make, though. Why not bump it up just a little bit. For example, a monthly payment of $300 bumped up to $350 probably won’t break your bank but, by the end of the year, will have paid back another $600 onto your mortgage more than you were expecting. That’s no drop in the bucket! It adds up. In a decade, that’s $6,000 you’ll pay back sooner.

Ways to Pay Off Your Mortgage Faster #2:

Increase Your Payment Frequency

This strategy is sometimes offered by your lender or mortgage broker when setting up the loan. If it’s not offered, you should definitely ask. Accelerated payment schedules increase the number of mortgage payments you make in a year (i.e., you might make two payments a month instead of one). As you can imagine, this is a quick method to pay down your mortgage sooner – just make sure you can afford the sustained frequency increase.

Ways to Pay Off Your Mortgage Faster #3:

Lower Your Interest Rate

A small change in interest adds up over time and can mean thousands of dollars extra or saved in what you have to pay. Therefore, when it comes time to renew your mortgage, work with your mortgage broker to ensure that you are getting the most favorable interest rates available.

The first three ways are ways to consistently pay down your mortgage faster. Here’s one more:

Ways to Pay Off Your Mortgage Faster #4:

Make an Additional Payment

When you get extra money, put some of it toward your mortgage. For example, if you get a tax return or a bonus at work or even a small inheritance, put some of that money toward your mortgage as a single “lump sum” payment. One or two of these a year may not seem like a lot but they add up.

Your mortgage can take years to pay off… but it doesn’t have to take as long as you expected. Use these ways to pay off your mortgage faster.

Why Mortgage Refinancing? The In’s and Out’s And What You Need to Know

Your mortgage can seem like a long term commitment – a financial obligation that stretches over many years, even a couple of decades. It may be a long term commitment but you’re not locked in. The economy and the interest rate changes and you build up equity in your home, so being able to adjust your mortgage allows you to optimize your mortgage for your needs. In this blog, I’ll explore the in’s and out’s of mortgage refinancing and why it might be a smart financial move.

Interest Rate Adjustment

The first reason that most people think about refinancing is because the mortgage interest rates have changed. If banks are offering a lower interest rate than what you committed to in your mortgage, it might make sense to refinance (and even pay a small penalty) to take advantage of that lower interest rate.

Tap into Equity

As you pay off your mortgage, and as home values increase in general (which they tend to do, although not always consistently), you build up equity in your home. You can access that value and borrow against it, usually through a home equity line of credit, which is a low-interest revolving loan. Use that money to pay down debts, fix up your home, reinvest in other things – whatever you need.

Mortgages are long term financial obligations… but refinancing makes it possible to adjust our course as necessary. In this short blog post we’ve only been able to cover the in’s and outs of mortgage refinancing and why homeowners love it. Adjusting your mortgage through refinancing allows you to pay less and to tap into the value that is building in your home. It can be a great idea! Talk to a lender or mortgage broker to see if it’s right for you.

The “Backwards” Way Finding the Best Mortgage

Looking for your next home – and the mortgage you’ll use to buy it – is like traveling to a foreign country. The language and customs are different and your head will spin with an overwhelming number of details.

Most people who find themselves in this strange land of mortgages try to find their mortgage as quickly as possible. They race to a mortgage that, at first glance, looks like the right one for them. But that approach doesn’t assure that you’ll get the best mortgage for your needs.

Since your mortgage represents the largest purchase, here’s the way that you should find your best mortgage (and stay sane while doing it).

First, take your time. Don’t rush to find the mortgage. There are plenty of mortgages out there and plenty of lenders. Decide ahead of time that you’ll narrow your choices and evaluate from a position of confidence and patience rather than impatience.

Second, get educated. Yes, there are highly qualified mortgage experts out there who can help you find a great mortgage but the onus is on you to decide what’s best for you. Learn everything you can about the local real estate market, the mortgage industry, and what mortgages are available to you. It’s just like landing a plane:

1. Start at 50,000 feet and develop high-level knowledge about the market in general

2. Then go to 40,000 feet to learn about the market right now

3. Then go to 30,000 feet to learn about real estate and mortgages

4. Then go to 20,000 feet to learn about the most applicable real estate and mortgage options for you

5. Then go to 10,000 feet to narrow your options and learn more deeply about each one

6. Then land that plane and decide on the best mortgage to meet your needs!

Third, find a mortgage broker who can work with you. They’ll not only take away a lot of the guesswork, they can help you through each level of learning and you’ll end up making the best mortgage decision for you!

4 Ways That Vancouver Mortgage Professionals Help Find Flexible Payment Options for Homebuyers With Non-Traditional Mortgage Needs

When I was growing up, my parents moved a couple of times, and each time they did the same thing: My dad would go to the bank (“our bank” my parents would call it) and sit with someone there and then come away with a mortgage. That’s not the way it works anymore. Today, my spouse and I both meet with a local mortgage broker – a Vancouver mortgage professional who helps find flexible payment options for us.

Today, dads are no longer the main breadwinners, nor are mortgages the same financial instrument they once were. Here’s what my mortgage broker did for us:

·         The job market has changed and is far less secure than in dad’s day (no more “jobs for life!) We want to pay less on our mortgage and a mortgage broker helps find mortgages that cost less over the life of the loan as well as on a monthly basis.

·         As freelancers (I’m a photographer and my wife is a graphic designer) our income is pretty good but frankly it’s all over the map – we go from boom to bust and back to boom again. Our bank is still stuck in the Stone Age and didn’t “get” this but our mortgage broker nodded, smiled, and said it wouldn’t be a problem… they even found us a mortgage where we could skip occasional payments or pre-pay without penalty.

·     We were able to select the days of the month we wanted our payments to come out – multiple payments and the frequency of those payments (and our mortgage broker even showed us a trick to pay off our mortgage a little sooner by helping us “sneak in” an extra couple of payments a year).

·         Our favorite: Our Vancouver mortgage professional helped find flexible payment options at zero cost to us. This was a service to us that was essentially free – keeping more money in our pocket while finding the best rate out there.

I learned that mortgages are like complex machines with all kinds of “buttons” – from payments schedules to interest rate and more. And our mortgage broker pushed all the right buttons to find a mortgage that worked for our unique situation.

Should You Renew Your Mortgage? Why a Professional Mortgage Broker Can Help.

If there is one constant in life, it’s that things change – and circumstances have probably changed since you hired a mortgage broker and took out your current home loan.

Perhaps your current mortgage is no longer a good fit for you and your family and you are thinking of talking to a mortgage broker about mortgage renewal.

After all, shouldn’t your mortgage adjust according to your changing circumstances? 

If you are considering renewing your mortgage it is very likely that you are in the process of reevaluating your financial goals and reflecting on the last time you spoke with your broker.  

Is mortgage renewal right for you?

Maybe your income level hasn’t changed significantly but the value of your home has, in which case adjusting your monthly payments might be a wise thing to consider. 

The process of renewing your mortgage in Vancouver boils down to finding a loan that best reflects your new lifestyle. 

This is why it is so important to find a professional mortgage broker who will sit down with you and talk about your interest preferences: are you looking to save through variable rates or seeking the simplicity and security of a fixed rate term?

A good mortgage broker will speak to you about your current mortgage and how your needs have changed since you signed up for it. 

Keep in mind that you don’t have to renew your mortgage through your current lender.

A professional mortgage broker can make a big difference helping you choose from a host of loan terms at competitive and less competitive rates. 

Start shopping

Don’t wait until you get a renewal letter from your lender. 

Get in touch with a mortgage broker a few months before your mortgage term expires to see what’s out there, and if you can find loan terms that are a better fit for you. 

Remember that if you don’t take initiative on time the lender may automatically renew your mortgage for another term.

You may qualify for a lower rate and not even know it. 

Mortgage renewal can save you money, so contact us now to speak to a professional mortgage broker about your options. 

Mortgage Rates: Should You Rent Or Buy?

It’s no news that the big banks, headed by RBC but swiftly followed by Scotia, BMO and TD, have slashed their fixed five-year mortgage rates earlier this year, on the heels of fallen funding rates. 

Now the word on the street is the growing concern about the upshot anticipated higher rates will have on home buyers who have signed up for bloated mortgages on unusually low lending rates. 

Does this mean Canadians without deep pockets, that is mostly everyone, will soon be better off renting than buying?

How close are we to this boiling point?

As of now Bank of Canada forecasts mortgage rates going up, but only slightly in the short-term. 

More specifically, one-year interest rates are expected to hover at 3.24% in the first quarter of 2015 and then edge up to 3.60% in the fourth quarter. 

Five-year mortgage rates are seen inching up to 5.14% in the first quarter from present 4.99%, and increase to 5.65% in the fourth quarter. 

In other words, the low interest rate epoch may soon be closing in on us. 

The accepted truism in our society is that we should buy real estate which, for most of us, means taking out a mortgage, in lieu of renting because it’s a meaningful investment over the long run. 

But despite the historically low interest rates, the skyrocketing prices and maintenance fees – coupled with the anticipated rise in interest rates – are forcing many potential home buyers to postpone or rethink buying a home. 

And don’t forget that mortgage experts generally agree you should spend no more than about 30% of your household income on housing outlays. 

Bearing all this in mind, many potential home buyers might be better off renting for a while and putting their saved money into another investment that could earn more in the long run. 

You might be one of them. 

“I wish I’d known!” - 4 Tips for a Mortgage for First-Time Home Buyers

It would be nice if life came with an instruction manual… But it doesn’t. So when you’re looking to buy your first home, it can be easy to become overwhelmed with questions over this confusing process. Here are 4 tips for getting a mortgage for first-time home buyers. These are the “I wish I’d known” instructions that previous homeowners have found out… the hard way! Learn from their mistakes!

Tip #1: Be credit-rating savvy

Great mortgage rates are largely influenced by your credit rating. The better your credit, the better mortgage rates you may get on your mortgage. Therefore, if you are a first-time home buyer who is thinking of getting a mortgage, even if it’s a few years down the road, start working on your credit today. The effort you invest now could save you a lot of money in the future.

Tip #2: Get pre-approved

Too many “newbies” start by looking for their dream home and then when they go to get their mortgage, they discover that it’s out of their price range. Start by getting pre-approved and that will help you know exactly how much you can afford.

Tip #3: Don’t just focus on the interest rate

A great mortgage for first-time home buyers is not just one with a low interest rate. There are many components to a mortgage that you need to consider. Interest rate is one, of course, but so it your term (how long you’ll be paying your mortgage off) and the frequency payments are also a factor.

Tip #4: Remember closing costs!

This can be the most shocking mistake of them all because a mortgage for first-time home buyers is only the first step. There are additional costs – not associated with the mortgage – that are required for closing. These including home inspections, lawyers fees, moving costs, and more. Be prepared to pay for these costs as well!

First time home buyer? Congratulations! Make sure you follow these 4 tips to help you navigate the complex world of mortgages more easily.

New Discovery! Canadian Mortgage Calculator: Vancouver

If you live in the Vancouver area and are thinking about buying a home, you’re probably conducting research to find the right mortgage for you - you’re thinking about rates and terms. The problem is, a lot of mortgage information is specific to other locations, such as the US. Even if you do find a mortgage calculator that brings in Canadian rates and terms, it may not address the unique characteristics of those who are getting a mortgage in Vancouver BC. However, we’ve just discovered some online mortgage calculators in Vancouver that you might find really useful.

Online mortgage calculators (in Vancouver and elsewhere) are easy-to-use web-based “apps” that you can use to enter information about a mortgage to answer commonly asked questions you have about your mortgage. For example, by entering basic mortgage information such as your down payment and the rate of the mortgage, you can find out key pieces of information like how much your payments will be and how much interest you will pay overall.

Smart home buyers know that this information will help them make a great mortgage decision and, ultimately, an affordable home purchase.

And you can use these online mortgage calculators in Vancouver to help you zoom in on a mortgage payment that works for you. For example, if you enter one amount for your down payment but find the monthly mortgage payments are too high, you can always adjust the down payment to lower your monthly payments. That’s the bonus value of a mortgage calculator – it’s a quick way for you to understand your own mortgage obligations before you take action.

So check out these online mortgage calculators in Vancouver to take ownership of your mortgage and to ensure that you are getting the right mortgage for yourself.