Most of us dream of homeownership. A place to call our own, with no worries about landlords or increasing rent; maybe you’ve always wanted a pool or a backyard garden.
No matter what your dream home is, it’s likely you’ll need to get a mortgage to pay for it. Fortunately, mortgage rates are at all time lows, making it easier for you to get into your dream home.
But once you’ve got your mortgage, what do you do then? Perhaps you’re committed to paying it off as quickly as you can, but you aren’t sure how.
At sMp Mortgages, we’re here to help you learn how to reduce your mortgage payments. We have some great tips that will help you pay off your mortgage faster:
- Pay more each month on your mortgage.
- Put down a lump sum once a year on your mortgage.
- Refinance your mortgage.
We’ll tell you more about each of these tips and how sMp Mortgage is committed to helping you reduce mortgage payments in Mississauga.
Pay More Each Month On Your Mortgage
You can start paying off your mortgage faster by putting more money each month towards your mortgage. There are two different ways you can do this:
1. Increase the amount you are paying for your mortgage payment
Even if it doesn’t seem like much, an extra twenty dollars every time you pay your mortgage adds up. The more money you can pay each time, the faster you are paying down the interest as well as the principal.
2. Select to pay your mortgage using an accelerated payment option
With accelerated payment options — such as weekly or biweekly — you are putting more money toward your mortgage because you pay slightly less interest than you would be paying.
Both of these payment choices can help you reduce the amount of time and money you spend making mortgage payments. Before you commit to either of these options, check with your mortgage lender about:
- How much you are allowed to increase your payments without having to pay the penalty.
- Whether you can decrease your payments after you’ve increased them. If you aren’t sure you can carry pay a higher amount for the term of your mortgage, you may not want to raise them.
Not sure when a good time to do this would be? As soon as you get a raise, immediately talk to your mortgage lender about either increasing the amount of money you pay each time for your mortgage or how often you pay it. Since you were used to living on less money before you got your raise, you won’t have a chance to notice the difference if you immediately use it to start reducing mortgage payments.
Put Down a Lump Sum
Most mortgage lenders will let you put down a lump sum up to a certain amount of your mortgage each year to help pay it off faster. Here are some places a lump sum could come from:
- Tax refunds
- Selling fixed income items like bonds or GICs that payout less than you are paying in interest in your mortgage
- An inheritance
- A bonus
Putting down a lump sum is an excellent option if you’re not sure you’ll have the cash flow to sustain increased mortgage payments. With the lump sum option, you can put down only the amount of money you know you can reasonably spare.
An even better way to reduce mortgage payments in Mississauga is to put these two options together: To both increase the amount or frequency of your mortgage payments, as well as putting down a lump sum each year.
Refinance Your Mortgage
Another great way to reduce mortgage payments in Mississauga is to refinance your mortgage. When you refinance your mortgage, you break your current mortgage contract and start a new one. Your new mortgage can be with either the same lender or a new one.
The main reason to refinance your mortgage is to take advantage of lower rates. Lower rates will reduce your mortgage payments. However, you may have to pay a prepayment penalty if you break your mortgage contract, so you have to figure out if it’s worth it or not before doing so.
At sMp Mortgages, we can help you determine if it’s worth refinancing your mortgage to reduce mortgage payments in Mississauga.
You’re Ready To Start Saving on Your Mortgage
Whether you’re looking for a mortgage or already have one and are looking to reduce mortgage payments in Mississauga, sMp Mortgages is here to help you. We’ve given you three great tips on how to reduce mortgage payments:
- Increase the amount or frequency of your mortgage payments.
- Save a windfall such as a bonus and put it down towards your mortgage as a lump sum.
- Refinance your mortgage to take advantage of lower rates.
To learn more about how to pay off your mortgage faster, call sMp Mortgages at 1 855 915 5139 or contact us here.