Why We Want To Pay Off Our Mortgage Early

Contributor: Nurse Frugal at Ladies Go First Paying off the Mortgage early, that’s what we’re doing and here’s why. I vividly remember the day when I came home from work and my husband was sitting behind the computer with a perplexed look on his face.  He looked up at me and asked “I don’t know, do you think we should pay off the house loan too?” Here Is Some Background………… A few weeks earlier we had just started listening to Dave Ramsey, a radio host and author that believes that becoming debt free is the key to financial freedom and building wealth.  We had just emptied out our savings accounts to pay off the two brand new cars we had just financed. My heart sank in my chest, was my husband taking crazy pills before I came home?  Did he realize that paying off the mortgage would mean that we would have to work lots of overtime for years and years to ultimately pay off the $233,346.60 owed on our mortgage?!?!  He proceeded to do a mortgage calculation that revealed that if we didn’t pay off the house early we would pay $118,123.78 in interest throughout the life of our mortgage, […]

Should You Be Breaking Your Mortgage?

Are you thinking about breaking a mortgage early? Most people assume that when they sign up for a 5 year fixed rate that they have to stay in that mortgage for the next 5 years…that isn’t true in most cases.  While there are a few lenders out there who have “closed” mortgages that are not breakable without a bona fide sale of the property, the vast majority are breakable. So how does that work?  If you decided that the rate you were paying was too high or you wanted to add funds in a refinance or various other situations that made you want to break the mortgage you were in, how can it be done?  If your current mortgage rate is less than lender’s rate on the equivalent remaining term, you simply pay a 3 month interest penalty…for example: Current mortgage of $150,000 @ 3.25% with 3 years remaining Lender’s 3 year rate is currently 3.45% 3 Months interest = $1,219 approximately ($150,000 x 3.25% /12 x3) What if the opposite is true, the current rate you have on your mortgage is higher than the current available from the lender?  Now we enter the world of IRD, or Interest Rate […]

Top 3 First Time Home Buyer Mistakes!

BEFORE SAYING YES TO HOME OWNERSHIP- DO YOUR RESEARCH   Anyone who has been a home buyer in the past can tell you what they would have done differently had they have know what they know today. Everyone who has bought a home has been through it, the scary, nervous time of learning a new language, relying on strangers you don’t know and making massive decisions you are sure will ruin your life. All this while getting opinions from everyone you have every known whether you want them or not! Despite all this there is an upside…you also get to have you own home! Related: How to test budget a mortgage BEFORE you buy your first home In the hope of helping those who have not gone through this “rite of passage” to home ownership, I want to share with you some of the most common mistakes people make and how to avoid those yourself. As a home buyer you must take the initiative to explore all avenues and to trust no one but yourself and the professionals you hire. Even then keep a close eye on everything you sign up for.   1. Most people don’t work out what […]

How To Maximize Your Mortgage

  TAKE ADVANTAGE OF SHAVING YEARS OFF YOUR MORTGAGE Many people get into their first home and are so busy fixing it up, moving in and just getting used to their new home they quickly forget about their mortgage, other than that big chunk of cash that goes out of their account every month. They are losing money by ignoring it! Many banks don’t explain much in the way of “best practices” with mortgage repayment.  One of the simplest is paying your mortgage on either a Weekly or biweekly basis to speed up the repayment process, but beware, some banks offer non-accelerated weekly or biweekly which do nothing to pay back your mortgage faster! Follow this simple system when setting up your payments: If you are paid every 2 weeks, pay your mortgage with biweekly accelerated  If you are paid any other way, pay your mortgage weekly accelerated. The reasoning is simple, say your mortgage is $1000 per month, paying biweekly accelerated puts more onto your mortgage in a year ($500 x 26 = $13,000 vs. $1000 x 12 = $12,000), same with weekly accelerated ($250 x 52 = $13,000). So apart from your mortgage payment, what else can you […]

Our Canadian Home-Tips to Save for a mortgage Down Payment

A HOME IS A BIG INVESTMENT   Saving for a down payment on a home is probably one of the biggest goals many people set out to achieve when they want in on the real estate market. Are you thinking of making the move into home ownership? Deciding whether you should continue to rent or buy a home is a decision only you can make. People often ask me why I chose to buy a home so young when I was living in the UK. I decided to buy so young because my parents taught me the value of money early. I saved my money because I knew that I should be able to make more money over time if I invested it wisely. I also realized that I didn’t want to rent but that I’d rather own my piece of land in this world. I’m not going to lie and say it was easy as that’s simply not the truth. I worked hard and long hours to get me into the home ownership scene. I had no debt and paid cash for everything I needed. My wife was the same way growing up so we both had an understanding […]

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