Save Money On Your Mortgage

The ABC's of mortgage tech

Almost all industries have what seems to be a language of their own. An internal lingo of words, slang, or acronyms that become so natural to those that work in that profession that at times they don't even realize they are speaking it in front of clients.

Ever been to a physician's office and heard something you didn't understand when given the prognosis? Or how about when you take your vehicle to the mechanic? The same can be true when dealing with your home financing. Making sense of this terminology can be difficult so this week I thought we would look at a few of the common terms and their definitions:

Amortization period

The time over which all regular payments would pay off the mortgage. This is usually 25 years for a new mortgage, however it can be greater; up to a maximum of 30 years.

Blended payments

Payments consisting of both a principal and an interest component, paid on a regular basis (weekly, biweekly or monthly, for example) during the term of the mortgage. The principal portion of payment increases, while the interest portion decreases over the term of the mortgage, but the total regular payment usually does not change.

Canada Mortgage and

Housing Corporation CMHC

The National Housing Act (NHA) authorized Canada Mortgage and Housing Corporation to operate a Mortgage Insurance Fund that protects NHA Approved Lenders from losses resulting from borrower default.

Closed mortgage

A mortgage agreement that cannot be prepaid, re-negotiated or refinanced before maturity, except according to its terms.

Debt-service

ratio (DSR)

The percentage of the borrower's gross income that will be used for monthly payments of principal, interest, taxes, heating costs and condominium fees.

Gross debt service (GDS) ratio

The percentage of gross income required to cover monthly payments associated with housing costs. Most lenders recommend that the GDS ratio be no more than 32 per cent of your gross (before tax) monthly income.

Principal,

interest and taxes (PIT)

Principal, interest and taxes. Together, these make up the regular payment on a mortgage if you elect to include property taxes in your mortgage payments.

Porting

This allows you to move to another property without having to lose your existing interest rate. You can keep your existing mortgage balance, term and interest rate, plus save money by avoiding early discharge penalties.

Easy Ways To Save Money On Your Mortgage: Guide To Save On ...

When we say the term “mortgage” what do we really mean? Mortgage is a loan that is secured by a house or property and that is paid in a series of smaller payments over a period of time. Most mortgage’s are paid off in 15-30 years depending on several various factors.

If you are looking for a quicker and easier way to save on mortgage , then read on.

Each yeah, financial institutions allow you to increase your mortgage by a certain percentage rate. (Sometimes this rate of increase is set by you, and other times your bank may set the limit for you.) By increasing the amount you pay, you can save on mortgage by paying off your interest faster. Refinancing: For many people this option ends up costing more money than it saves, however it is a good idea to do this if you can get a really good difference between your existing mortgage rate , and the new one. You should take some time to calculate how much money will be saved on mortgage with the new rate versus the old rate. Then determine if that amount is larger than what the refinancing costs are. If it is, then refinance away! Most homeowners make a down payment that is 10% of the purchase price for the house. Anytime you make a down payment that is less than 20%, you must pay a PMI (Private Mortgage Insurance) along with the regular interest on the loan. This can add around $100-$150 to your monthly payments. To make matters worse, PMI can’t be deducted from your taxes unlike regular mortgage interest. So save up and pay 20% or more on your down payment if you want to save on mortgage.

Does your neighborhood have annual or semi-annual garage sales? Take advantage of the many people that roam around looking for cheap junk. There are a lot of opportunities to get rid of old records and CD’s, to the music fanatic who is pondering your sale. In addition, there are a lot of tiny things that save you money in general, not just on your mortgage. You could skip on that $1.00 coffee from the coffee house. Plus $200 a year. You can put aside $5.00 into a jar every week. Plus $260 a year. You can give up smoking and help your health and your wallet. At $6-$7 a pack, and a pack every week, you’ll be saving $312-$364 a year. More if you smoke frequently! And suddenly you have $772-$824+ extra in your pocket. There are probably more things you can do to save, just use your mind. Grocery coupons, Black Friday sales, insider programs…etc!

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