You may be paying too much – If you haven’t reviewed your mortgage for a while, it is quite possible you are paying much more than home buyers are today. Therefore, searching for the new deals available could cut your monthly payments.
Review your prepayment options – Within the allowed limits, you may find it beneficial to start taking advantage of your prepayment options in order to reduce your mortgage principal, this therefore means there is a lower balance for interest to accrue on, so you would pay less overall. Many mortgages offer annual lump sum payments, increased regular payments and/or double up payments. The advantage to making extra payments rather than choosing to reduce your amortization is that you can stop these extra payments at any time should you need to.
Your credit score may have improved – If when you took out your mortgage, your credit history wasn’t the best, it is likely that your provider charged a higher interest rate in order to counteract this. If your credit scoring has since improved, it may be beneficial to review your mortgage in order to see whether a better deal with lower interest rates is available to you.
In summary, reviewing your mortgage can result in reduced monthly payments however; it is also important to bear in mind there may be potential costs involved. These include costs such as appraisal fees, legal fees and penalties. Therefore, you must ensure you have considered the possible costs involved as well as reviewing the potential cost savings. A licensed Mortgage Broker can help you determine the most beneficial options for you and see just what makes sense.
Please contact us to setup your mortgage review.