You spend a lot of time preparing for the day you’ll get a mortgage: saving for the down payment, getting your paperwork in order and house hunting. You spend even more time dreaming of the day you’ll be mortgage-free.
Owning your home is essentially financial freedom. It is a huge milestone and changes your monthly cash-flow and ability to save more than any other financial obligation.
Since owning a home is likely the largest purchase you will ever make, it is common to apply for a mortgage with a partner. Multi-applicant mortgages have gained traction due to rising home prices. It means taking a mortgage out with another person, or multiple people. The responsibility of the loan and the mortgage contract is shared between all those that apply together. Applying together can increase the odds of getting an approval, can give you the opportunity to have a larger loan and decrease the amount you need for a down payment. It helps lessen the financial strain on one person, but also means you will share the upside if your home increases in value when you go to sell.
No matter if you are planning on taking on a mortgage on your own or with a partner, you can make your mortgage add up to financial success faster in a few easy steps.
Accelerate your payments
Line up your mortgage payments with your paycheque and make them slightly larger. You’d be surprised how a few extra dollars a month can potentially shave years off your mortgage.
Put any extra dollars against your principal
If you get a tax refund or a bonus, instead of spending it on new clothes, shoes or even a vacation, consider putting it against your mortgage. When you put lump sums against your loan you pay off the principal faster. This means in the long run you are paying less in interest, putting financial freedom in your near future.
It will seem minimal, but you will be surprised at how much faster you’ll be able to pay off your mortgage. Instead of paying $2,117.90 per month, round it up to $2,200 or if you’re able, $2,500! You likely won’t feel the pinch as much in your monthly cash flow, but you will notice the years it takes off your mortgage!