{"id":1208,"date":"2016-03-11T15:15:51","date_gmt":"2016-03-11T23:15:51","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=1208"},"modified":"2016-03-11T11:54:03","modified_gmt":"2016-03-11T19:54:03","slug":"best-practices-for-paying-off-your-mortgage","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/03\/best-practices-for-paying-off-your-mortgage\/","title":{"rendered":"Best Practices for Paying Off Your Mortgage"},"content":{"rendered":"<p style=\"text-align: justify;\">Choosing the right mortgage can be challenging, but it\u2019s really only the first of many hurdles on your trajectory to owning your home. Once you\u2019ve locked your mortgage in, you then have to decide how to pay it off in the most efficient manner \u2013 without spreading yourself too thin. Here are some things to consider and best practices to follow.<\/p>\n<p style=\"text-align: justify;\"><strong>Points : To Pay or Not to Pay?<\/strong><br \/>\nWhen comparing interest rates from different lenders, don\u2019t forget about points. These upfront payments are a percentage of the mortgage principal \u2014 one point is 1% ($2,000 on a $200,000 loan) \u2014 and are a way to reduce interest rates over the entire life of the loan.<br \/>\n\u201cYou\u2019re prepaying interest,\u201d said Greg McBride, chief financial analyst for Bankrate.com.\u00a0 \u201cAnd, the longer you can stay in a home, the more sense it makes.\u201d<br \/>\nPaying one point will usually lower your interest rate an eighth to three-eighths of a percentage point, according to Keith Gumbinger of HSH.com, a mortgage information provider. Instead of a 4% rate, for example, buyers get 3.875% to 3.625% loans. That saves about $15 a month at 3.875% and $44 at 3.75% on $200,000 in principal. At $15 a month, it takes about 11 years to offset the upfront cost. At $44 a month, it takes less than four years, so borrowers should make sure they shop for the best deal for the points they pay.<br \/>\nOnly pay points if you have excess cash, advises McBride. Otherwise stash the money in an emergency fund.<br \/>\nBut if you are confident that you already have enough savings for a rainy day, and you plan to spend a long time living in the home, pay the points, said Gumbinger. \u201cIt saves you money over the long haul.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>Making Extra Payments<\/strong><br \/>\nBorrowers always retain the option of making extra payments any time over the term of the loan. For that reason, some borrowers may opt for a 30-year mortgage even when they think they can afford a 15-year. They can make extra payments as an occasional or one-time event, or on a regular basis, but when money is tight, they can suspend them.<br \/>\nMaking extra payments can shorten a mortgage term dramatically and save tens of thousands of dollars in interest. On a $200,000 loan at 3.65%, adding a $1,000 payment once a year can lop four years off your payments, saving nearly $20,000. When interest rates are higher, the impact is even greater.<br \/>\nMcBride cautions, however, to only pay out surplus cash. Once it\u2019s sent to the mortgage lender, it\u2019s hard to access that money again.<br \/>\nIt\u2019s important to remember that just because you\u2019ve locked in a particular mortgage, you still have the flexibility to pay it off sooner if you can. Making extra payments and paying points can save you a lot of money in the long run.<\/p>\n<p><a href=\"http:\/\/blog.coldwellbanker.com\/best-practices-paying-off-mortgage\/\" target=\"_blank\">Best Practices for Paying Off Your Mortgage<\/a> by Les Christie | Coldwell Banker Blue Matter<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Choosing the right mortgage can be challenging, but it\u2019s really only the first of many hurdles on your trajectory to owning your home. Once you\u2019ve locked your mortgage in, you &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/03\/best-practices-for-paying-off-your-mortgage\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1208","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Best Practices for Paying Off Your Mortgage &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2016\/03\/best-practices-for-paying-off-your-mortgage\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Best Practices for Paying Off Your Mortgage &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Choosing the right mortgage can be challenging, but it\u2019s really only the first of many hurdles on your trajectory to owning your home. Once you\u2019ve locked your mortgage in, you &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/03\\\/best-practices-for-paying-off-your-mortgage\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/03\\\/best-practices-for-paying-off-your-mortgage\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"Best Practices for Paying Off Your Mortgage\",\"datePublished\":\"2016-03-11T23:15:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/03\\\/best-practices-for-paying-off-your-mortgage\\\/\"},\"wordCount\":486,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"articleSection\":[\"Mortgage\"],\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/03\\\/best-practices-for-paying-off-your-mortgage\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/03\\\/best-practices-for-paying-off-your-mortgage\\\/\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/03\\\/best-practices-for-paying-off-your-mortgage\\\/\",\"name\":\"Best Practices for Paying Off Your Mortgage &#8226; 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