Buying a home is a unique and the biggest investment of their life for most people. Therefore, it is critical to spend time to find the best mortgage product.
Well-informed and knowing simple but smart strategies can save you thousands of dollars and also help you paying your debt earlier.
Do not be blinded by the cheapest rates
It is a fact that the best mortgage is not the one with the cheapest rate.
Therefore, do not be blinded by the cheapest rates, when you are shopping for a mortgage. Do not be excited by the cheap rates in the first five years. Most important for you, is to plan a specific proactive mortgage strategy.
Strategic planning does not mean stability for the longest term possible
In today fragile economy, with many changing economic conditions, a stable rate may be a mistake.
Statistics clearly show that in the first three years more than 70 % of mortgages are recalculated or renewed. That can means penalties for you if you choose a five years term.
More advantageous for you it is to choose a three years term and then pay five years to five years rate. Add to this that typically a three years term is 20 % lower than five years term. That can save you a lot of money.
How can you prepare for the inevitable rise in rates?
Appealing again to the statistics, we can see that low rates are not sustainable in the long run. That means disaster for an average family.
A wise tactic is to take inflation in consideration. Therefore, the best solution is to take out a new mortgage and recalculate your existing payment according to it.
In conclusion, just adjusting your monthly rates with a small amount of money can cover you from unexpected and in the same time, can reduce the principle.
The accelerated mortgage can make you mortgage free sooner
An accelerated mortgage is a much easier way to pay your debt and also can have a big impact on your savings. Instead of paying biweekly your mortgage, you can choose to pay weekly your monthly mortgage, and even to make a double payment on the first week of each month.
Flexibility is the most important mortgage strategy
Flexibility is the best mortgage strategy for you in a long run.
A broker can offer you good and low mortgage rates, but in a long term, you cannot know how can evolve the economic conditions and your family income. Therefore, it is wise for you to adopt a flexible policy.