Tips For Saving Money On Your Mortgage
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How to save on your mortgage?
One of the biggest obstacles first-time home buyers face is saving for a down payment. Luckily, breaking your savings plan into small steps can make the process less overwhelming.
Save for a Down Payment
In most cases, you need to put down a down payment of at least 20% of the purchase price of your home. This can be a lot of money to save up, especially if you aren’t already paying off other debts. It is best to start saving early, even before you know you’re going to buy a house.
Consider a Mortgage Refinance
Many times people can save on their mortgage payments by refinancing their existing loans to a new, lower rate. This can be done through a number of ways, including paying discount points or unique loan types like an Adjustable Rate Mortgage (ARM).
Refinancing can also help you avoid paying mortgage insurance on a fixed-rate loan. This insurance protects lenders in case you default on your loan.
Use Your Bonus, Stock Options or Gifts to Pay Off Your Mortgage
If you’ve been lucky enough to land a huge lump sum of cash due to an inheritance, stock options, a big bonus, or a gift from someone else, it is best to apply this immediately to your mortgage to reduce your overall interest expense. This can make it easier to get your mortgage paid off faster and allow you to save for bigger goals.
Making More Biweekly Mortgage Payments
By making an extra mortgage payment every other week, you can save thousands of dollars over the life of your loan. This will help you avoid mortgage insurance, and it can also increase the amount of equity you build in your home over time.
Save More in Your Mortgage Escrow Account
The escrow account is where you set money aside for your mortgage payments. This includes your monthly payments, plus an additional amount for property taxes and insurance. It’s important to make sure you have enough money in this account because these expenses can vary year to year.
Keep Your Credit Score High
A good credit score is one of the most valuable assets a homeowner can have. Maintaining a good credit score can help you save more on interest and get the best loan terms possible.
You can improve your credit score by paying your bills on time and not maxing out your credit cards. It is also a good idea to pay off any other debts that have higher interest rates than your mortgage.
Doing this can help you reach your financial goals sooner and make it more likely that you’ll be able to afford a home in the future.
Be a Smart Money Manager
The more informed you are about your finances, the better prepared you’ll be to meet your goals. This can include saving for a down payment on a house or other large purchases.
It is best to make a budget and stick to it. This will give you an idea of how much you can tuck away each month to save for your down payment. By following these simple tips on how to save on your mortgage, you can make sure you’re in a strong financial position when it comes time to purchase a home.
Can you save on land tax transfer?
Yes, you can save on land tax transfer in Canada by transferring ownership of the land from one person to another without the need to pay land transfer tax. Transferring the land requires a deed to be registered, which will include all the details of the transfer. The amount of tax payable depends on the province or territory in which the land is located.