Remaining Financially Proactive in Trying Times
With the uncertainty of job loss racing through many homeowners’ minds these days, taking a proactive approach to this issue by putting mortgage payments aside while you’re still actively employed can help set your mind at ease.
It’s a wise move to set money aside each pay period so you can accumulate six to 12 months’ worth of mortgage payments in a short-term GIC as security for a possible job loss.
Planning for the future and potential job loss is one of the most important undertakings homeowners can make to ensure you can pay your mortgage in uncertain times.
And, best of all, if your job remains secure, you can take the money out of your GIC and make a pre-payment back on your mortgage on your anniversary date (or whenever your prepayment options permit you to do so), which can end up saving you thousands of dollars in interest payments and trim down the amount of time it will take to pay off your mortgage.
But if it’s not plausible to save money each pay period, refinancing to access the equity you’ve already built up in your home is another valid option for planning ahead in uncertain times.
In addition to freeing up money to store future mortgage payments in a GIC, some of the money can also be used to pay off high-interest debt – such as credit cards – and get you off to a fresh financial start.
You will find that taking equity out of your home to pay off high-interest debt can put more money in your bank account each month.
And since interest rates are at historic lows, switching to a lower rate may save you a lot of money – possibly thousands of dollars per year.
There are often penalties associated with paying your mortgage loan out prior to renewal, but these could be offset by the extra money you save through a refinance.
With access to more money, you will be better able to manage your debt. Refinancing your mortgage and taking some existing equity out could also enable you to do some home renovations, take a vacation or even invest in your children’s education.
As always, if you want to talk about your financing options, I’m here to help.
Source:
Narish Maharaj
Dominion Lending Centres Optimum
(780) 238 – 7038
Apply online : www.dlconline.com
Tags: Finance
