Increasing Mortgage Rates – Paying to Buy a House

Posted on May 14, 2010 
Filed Under Buying Your New Home, Valerie Zinger

With the recent increase in fixed rate mortgages, home owners are questioning what to do with their current mortgage – lock in now if they have a variable mortgage, stay put on the existing mortgage or convert to the new fixed rate.  Certainly a trip or call to your mortgage broker / bank to ask these questions is advised. 

If you have a great rate and it is fixed for a few more years, why not follow some wonderful advice from the mortgage industry – start paying your mortgage at the new higher rate (even if some of the money is put aside for single payments).  This will do two things for you.

1.  You will get accustomed to the higher mortgage payments so there will be no surprise when your existing term if over.

2.  You will have increased your principal payments so that when you renegotiate your mortgage, you will own more of the house – thus reducing the number of months or years of your mortgage. 

There are many ways to reduce your mortgage.  This is one tip that has two advantages – for you.

Photo credit:  3D Realty Handshake @ http://www.flickr.com/photos/lumaxart/2136953043/

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