Homeowners New Year’s Resolutions

Mortgage Tips

As we take in a new year we think about ways to improve in 2017. Here are some simple New Year’s resolution tips for a homeowner. Whether your goal is to lower interest costs, pay off your mortgage sooner or prepare for higher rates at renewal time, any bit will help you financially.

It is important to pay extra on your mortgage, but not as important as paying off higher interest debts. If you have credit card debt to pay off from the holiday season, pay it down first. Once it is gone you will have more cash flow to work with and add towards other financial goals.

Accessing your home equity is also a great way to pay off high-interest debt and roll it into one manageable mortgage payment. If you have more than twenty percent equity in your home, you may be able to refinance it at today’s low mortgage rates. This will save you from paying higher interest rates on credit cards or lines of credit.

Once you have the higher interest debts paid off you can start thinking about ways to pay down your mortgage faster. The simplest way is to start making accelerated mortgage payments. A change from monthly payments to accelerated bi-weekly payments will cost you the equivalent of one extra monthly payment per year. This will reduce the amortization of your mortgage by approximately three years over a twenty-five year period. Rather than paying $2,000 per month, you pay $1,000 every fourteen days.

Increasing your mortgage payment slightly is a great way to pay down the principal on the mortgage. Every extra dollar goes straight to the principal, in return building equity in your home.

The government is concerned that we may be going into a rising rate environment, which is evident by the moves the major banks have made this past month. Preparing yourself for renewal time is a smart idea. An added benefit of increasing your mortgage payment each year prepares you for the possibility of higher rates and higher payments come renewal time.

Ask your current lender if you can lock in a lower fixed rate today before rates rise. It is hard to determine what mortgage rates are going to do over the next year or two. Switching to a lower rate today and taking advantage of the savings is a way to guarantee your rate stays lower for a longer period of time.

Contact us for information or advice on setting a mortgage resolution goal this year. The Biggar Team can give you a no-cost, no-obligation opinion on what will work best for you this year. Whether you set a new goal or choose to accomplish an old one, we are here to help you along the way.

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