Your bank (mortgage lender) could be offering you these choices.
Change the frequency of the payments from monthly to weekly accelerated or bi-weekly accelerated,
Increase mortgage payments by certain percentage, and
Paying off a lump sum amount subject to pre payment privileges.
All these options will save you in interest over the term of the mortgage.
You should chose either or rather both the 1st and the 3rd options (if possible) and these will save you tremendously in interest payments over time.
The 2nd option will also save you significantly in interest over time, however, once your mortgage payments are increased these can not be decreased if you need them to be lower at some time in future.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Can you explain this ? I mean .. comprehend this pls.
Quote:
Originally posted by pratickm
In fact, if your property value is decreasing, it is all the more reason to pay it off as soon as you can, so that you lose less money.
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The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
Location: carl sagan's universe
Posted on: 09-10-08 14:23:48
Quote:
Originally posted by BAsh
Thank you all for replying.
Investpro, this house is in Brampton close 410 & Queens. Its a very old place built in late 60's.
If I start to pay more towards a property whose value may be decreasing (i dont know if it is increasing or remaines the same) dont I end up loosing money actually?
Please clarify.
Thanks again.
That area in Brampton is a pretty stable growth area, therefore it is best to pay down extra on your mortgage as per strategies outlined by Pramod.
You can also pay higher amounts monthly but don't make it a fixed amount o/w you will be bound to that amount (Pramod has touched on that)
Some mortgages allow you to pay extra by about 15-20% monthly. I am one who pays a fixed amount every month over and above the necessary amount but have not engraved it in stone.
I also pay lump sums at beginning of every year.
I have not increased the frequency of my payments which again is binding.
Also some banks will allow you to 'bank' the extra payments and allow you to skip a payment or two in a year (provided you have overpaid the normal amount). Two years ago I did exactly that- skipped 2 months of payments as I was away from TO, but had prior to that 'overpaid' my mortgage. This however has to be arranged with the bank beforehand.
In short - 'tis always good to pay down your mortgage if you can afford it and have some cash handy for emergency.
However it might be difficult to sell a home built in the 60s should you decide to move- seeing all the new construction in that area.
