3 ways to shore up your mortgage
February 8, 2024 | Posted by: Chad & Patty Southwell
A volatile economy should be reason enough to explore ways to increase financial security. Your mortgage is likely the biggest debt and your home, the most important asset you have. With an expensive and competitive rental market, it still makes sense to own. Unfortunately, most people are not in a position to buy a home cash, enter the necessity for a mortgage. The goal is to eliminate your mortgage while staying in a safe and affordable position. Here are three ways to shore up your mortgage:
1. Downsize. If you live in a home that is bigger than you need, consider downsizing. You will reduce your mortgage debt, utility bills and property taxes as a result;
2. Create a rental space in your home. Many municipalities are making it easy to convert single family spaces into legal rental units. Whether you informally rent a room to a family member or friend, or convert your basement to a legal apartment and house a stranger, the tenant income will subsidize your payment; and
3. Lock & load your mortgage. Do not play the variable market, select the longest fixed rate you can afford. Opt for a lender who will offer the most reasonable prepayment penalties that allow you to break the mortgage should you need to.
Additionally, saving three months of payments and paying off debt is highly recommended. After you have done that, increasing your monthly payments will drastically reduce your mortgage balance, while giving you the option to revert to a lower minimum payment should you need to.
A mortgage broker can help you achieve your goals and offer competitive mortgage options to get you mortgage free, faster.