Make the most of your mortgage

Buying a home costs slightly more this month than it did last month, as a result of rising interest rates.
Whether you're a first-time buyer or you're refinancing your home, you can save on mortgage payments by following these steps recommended by Royal Pacific REALTORS®:

Ignore the posted rate

if you negotiate we've found that lenders will give home buyers as much as a full point off the posted rate. This can make a big difference in your payments.

• Benchmark-priced apartment $390,899 (as of February 28, 2010
  
• Mortgage Rate: 5.39% for 25 years with 10% or $39,900 down payment
  Monthly payment: $2,629
  
• Mortgage Rate: 4.39% for 25 years with 10% or $36,900 down payment
  Monthly payment: $2,427
  
• Over 25 years this means a savings of: $60,600 or $202 per month for 300 months.

Compare rates

Contact several financial institutions or contact a mortgage broker and let them search for you.

Go shorter

If you shorten your loan repayment or amortization period to 20 years from 25 years, you'll pay your mortgage off five years sooner. You'll pay higher monthly payments, but you'll build equity faster and you'll pay less in interest over the long term.

Prepay

If you get a prepayment option, you can directly pay down some of the principal before it's due. Check for prepayment penalties.  

Pay more

If you pay bi-weekly instead of monthly, you'll make 26 payments in a year or 13 months instead of just 12 months. Or pay weekly and you can reduce your amortization to about 18 years from 25 years.

Contact us, we'd love to hear from you!

For more information on this article or how we can help you with your real estate needs, contact your Royal Pacific REALTOR® at 604-266-8989 or use our online form for 24/7 service Contact us