1) How much of your mortgage principle did you pay off this year? If you have had your mortgage for more than one year, you have most likely paid off more than in previous years since your interest payments are reduced slightly with each payment you make. A quick glance using online-banking will answer this question for you.
2) How often did you take advantage of your pre-payment options? These include double up payments, annual payment increases and principle payments (some financial institutions allow you to pay up to 20% off your original mortgage balance annually)
3) What about your holiday bonus? Can a portion of it be used to make an extra payment on your mortgage? One extra payment per year over the duration of your mortgage lifespan will reduce your mortgage amortization by years, which means you will pay less interest in the long run.
4) Do you have a home-equity mortgage with a line of credit attached?
What to do: pay off a portion of the balance with any extra funds you earn in December.
What NOT to do: finance your holiday expenses with your line of credit when you have no immediate game plan to reduce your balance. The last thing you want to do is spend the next 20 years paying off Christmas 2013!
5) Planning to buy in 2014? The holidays are a good time of year to discuss with family whether the upcoming year is the right time to purchase a home. Who knows, perhaps a generous family member will deliver a Christmas miracle and offer to help you out with your down payment!
6) Hint- hint! Mid-December to mid January is the quietest time of the year for your mortgage advisor, typically. Therefore it is easier for your advisor to spend extra time with you during a consultation.
7) Spring starts the third week of January in Squamish! Not only does the snow typically disappear for good by the January 21st but the spring real estate market ramps up by about the third week too. With inventory down compared to 2012, shopping earlier in the year ensures you will have a better chance of finding your perfect home (and still obtain the great mortgage rate your advisor guaranteed you in November 2013)
8) Planning A Renovation in 2014? With time off at home over the holidays, you have time to focus on what needs renovating and what doesn’t (especially if you are entertaining a houseful of people; many times entertaining a crowd will determine where the limitation of you home lie).
9) Assess whether your home is still the right fit. Is your home big enough for a growing family or entertaining your out-of-town visitors? Is your home too large to manage, now that family members have left the nest? Upgrading to a larger home may require a mortgage preapproval. Downsizing may mean debt reduction/elimination and ultimately greater cash flow for you.
10) Determine when your mortgage renewal date is. If it’s in 2014, remember to start discussing your renewal with your mortgage advisor 6 months in advance and obtain an interest rate commitment no later than 4 months in advance of your renewal date.
11) Do you have ample life and disability insurance coverage? Your mortgage advisor is authorized to arrange Mortgage Life & Disability Insurance for you. Such a discussion also opens the door to the benefits of insurance in your financial plan. Depending on your needs, your mortgage advisor may also refer you to a licensed insurance advisor or financial planner for more comprehensive coverage.
12) Looking for a trustworthy realtor? A mortgage advisor works with realtors daily. Based on your needs, your mortgage advisor will match you with an experienced realtor who’s the right fit for you.
Remember to support your friends and neigbours by shopping locally this holiday season. Whether shopping for gifts or obtaining professional services, for Squamish’s economy to prosper we must be mindful to “buy local” as often as possible.