FIve Ways to Prepare for Higher Mortgage Rates:
April 21 2015 Posted by Tracy Bennett
Mortgage rates on the rise? No need to panic; what you need is some smart strategies to prepare. Here are our top 5 tips:
1. Don’t take the money. If you’re buying a new home, don’t be tempted to borrow the maximum amount your lender will allow. Keeping your ratio below the maximum allowed makes good business sense if you plan to invest or save!
2. Do more than the minimum. If you have a variable-rate mortgage, build in some wiggle room by setting your payments higher than required. This can be done on any mortgage to pay it off faster and to build equity.
3. Plan to pre-pay. Find out what your pre-payment privileges are and pay whatever you can, either with increased payments or lump sum payments.
4. Conduct a reality check. Find out what your mortgage balance will be at renewal and use our online mortgage calculator to project what your payments could be if you renewed at a higher rate. Start to ease up to your new payment level so at renewal, it’s like a merge lane!
5. Watch your bad debt. Be cautious about any credit card or other high-interest debt.
Getting prepared for higher rates is not about panicking, it’s about being prudent. Talk to us. We can help you determine your best personal strategies to prepare for rising rates!