(NC) Just as life changes over time, the terms of a mortgage may need to change too.
“It's important for homeowners to review their mortgage regularly to make sure it's still the best fit with their current and future financial goals,” says Nupi Zubair, associate vice president of retail products at TD Canada Trust. “Depending on the situation or stage of life, a homeowner may want to reassess how quickly the mortgage is paid down or the frequency and size of their payments.”
Zubair offers some simple strategies for homeowners who want to reduce the cost of their mortgage and pay it off faster:
1. Increase mortgage payments. This can significantly reduce interest costs as well as help you pay down a mortgage faster.
2. Choose weekly or bi-weekly rapid payment options. Like increased payments, more frequent payments also reduce interest costs and help pay off a mortgage faster.
3. Make lump sum payments. Consider putting any extra cash, such as a tax refund, towards a mortgage. Just keep in mind what your prepayment privilege amounts are.
4. Explore flexible options. If caught between wanting to pay off a mortgage as quickly as possible and worrying about cash flow, take advantage of options which allow you to pay more when possible and ease off in months when other expenses prevent large payments.