Pay off your mortgage and save
If you discuss saving money on your home repayments and mortgage refinancing in Guelph with a qualified professional, they can explain in detail how in Canada it’s standard practice to amortize a mortgage loan. This in effect means the loan repayment is payable over a determined period of time in equal amounts.
This serves the purpose of enabling a lender to not only calculate expected earnings from their risk of lending you the money but also to set a time limit for repayment of the loan, in full. They are some of the factors associated with mortgage refinancing but the question is how can they be negotiated to help your financial position and save you money?
Being objective, you could say that as long as you save your money, how you do it is immaterial, providing it’s legal of course! As a homeowner, reducing the number of amortization years, or the loan term, will save you interest on the loan, but also increase your monthly mortgage payments, which may not be a viable option.
However, a specialist can help you with other options of saving money, such as by reducing the amount of interest you pay, increased or lump sum payments. This type of situation negotiated by a Mortgage refinancing specialist would permit you to pay a larger sum towards the outstanding principal and reduce your interest payments.
Saving you money
The purpose of this exercise is to save you money, therefore, keep in mind your goal, which is to lessen the mortgage settlement time. This will reduce the principal amount of the loan, resulting in you paying less interest. For any advice related to financial negotiations, it is always wise to consult a qualified professional. Your mortgage is for most homeowners their biggest debt and paying it off as quickly as possible should be listed as your priority.
However, there are certain circumstances whereby making settlement of the mortgage debt the main goal would not be an advantage. An example of this is a self-employed person or operates a home-based business. In this instance, a Guelph mortgage refinancing specialist may advise you not to pay off the mortgage early but save your money. This could be due to a portion of the mortgage interest being tax deductible, thereby reducing your taxable income!