Even for the savviest investors, it can be tricky to translate economic forecasts into useful information to plan your financial life. The Bank of Canada’soutlook for the 2013 economy recently became rosier, and with that news some financial forecasters in Calgary were certain that higher interest rates were right around the corner. But, thankfully, that is not the case. Rates are expected to remain steady and at a sustained historical low, so anyone looking for the best of the best needs to use every tool at their disposal. Start by consulting with a mortgage broker to access to all the options on the table.
It’s Renewal Time! Find the Best Rates With a Broker.
This is the time of year for mortgage renewals, and the Bank of Canada’s announcement of continuing low interest rates is perfect timing. When that renewal letter comes in the mail, many homeowners will see what they think is a competitive mortgage rate and likely stay on for more without a second thought. But is that really the smartest way to save money?
When the stakes are high, as they always are in Calgary’s real estate game, it’s best to get a second opinion. You should not assume your lender’s renewal offer is the best deal out there. Unlike a bank, which will only offer their line of mortgage products, a broker works with many lenders, has access to even more different options, and can provide a sharp perspective on everything. It is no coincidence that more people are turning to mortgage brokers for the best rates, the best service, and the best lending options than ever before.
There is a lot more to saving money in Calgary and area than securing an initial low-rate mortgage. One of the several options available to you is how often you make payments on your mortgage. The usual way is to pay once a month, but by switching to twice-monthly payments you actually gain yourself a payment each year. The math is simple. You will shorten the term of amortization and pay less in interest. By increasing payment frequency, smart investors can save thousands!
Prepay If You Can
By paying extra off the principal of your mortgage as quickly as you can, homeowners can pay off their debt much earlier and pay significantly less interest. For those who can afford to pay out extra cash toward the principal on their mortgage, this can be a great way to save. But be careful. Prepayment penalties can hurt! There are a variety of prepayment possibilities, and smart homeowners will discuss them with a mortgage broker to find the one that best suits their needs.
For the most part, the best way to approach your mortgage and save money in the long run is to:
- Pay the set amount on time every month to increase your credit and customer rating.
- Consult your lender or broker before rolling over a payment. After paying off a credit card or a car, it’s a great idea to start putting that extra amount towards your mortgage, but make sure your plan is able to absorb the change.
- If you refinance for a lower monthly rate, save the extra in another high-interest savings account for holidays and rainy days.
- The longer you manage to make your payments, the better, and the more likely it is that you’ll qualify for even more beneficial terms and agreements in the future.
There are other prepayment options, and those privileges vary greatly with different lenders. Verify that extra amounts you pay will be applied to your principal. Some mortgage providers require a letter with the prepayment. Others include a line for it right on your monthly statement.
Consulting with a mortgage broker is the best way to ensure you save!
Save Money On Debt
By consolidating higher interest debt like credit cards or lines of credit into a mortgage, homeowners can save on interest, make fewer individual payments per month, and have more cash in hand. Of course, debt consolidation is only worthwhile if it saves money in the long run. A mortgage broker like Mortgages By Candice can help you with the calculations and determine if this is the right strategy for you.
Getting the best Calgary mortgage rate is just the beginning of saving for smart homeowners. Lending rates will stay low for awhile, but not forever, so now is the time to meet with a mortgage broker that has access to a variety of mortgage products and – just as importantly – will help you reach your home ownership goal sooner.