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Saving For a Rainy Day?

Seems like we all looking for ways to save lately as a result of inflation. What are some quick mortgage tips to free up some cash flow?

Tip #1 - Extend Your Amortization

Extending your amortization won't help you save on interest, but it ⁠will help to lower your monthly payments and free up cash flow in ⁠a challenging economy. If you have 20% down payment or more ⁠for a new purchase or are refinancing your mortgage, you have the ⁠option to take up to a 30 year amortization. By taking a longer ⁠amortization, you will see a substantial drop in the monthly ⁠payment amount. This means it will take more time to payout your ⁠mortgage, however could make it less painful during the interim. ⁠You always have the option to add a lump sum payment to reduce ⁠your amortization at a later date when you are back on track.⁠

Tip #2 - Consolidate Your Debts

For anyone carrying excessive credit card debt or high interest ⁠debt, even with a mortgage interest rate in the 5% range, you are ⁠still saving substantially by consolidating these high balance debts ⁠into your mortgage. Most credit cards charge interest at 19% or ⁠higher and lines of credit can run anywhere from 1-5% higher than ⁠prime. By consolidating the debts into your mortgage, you will find ⁠a larger amount of your monthly income going into your pocket ⁠each month. Have your mortgage broker crunch some numbers ⁠for you to see if it is worth your while.⁠

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” – Ayn Rand

Tip #3 - Skip a Payment

Some lenders have the unique option to skip a mortgage ⁠payment available. This will allow you put the money on higher ⁠interest debt that you have accumulated to help free up monthly ⁠cashflow. Check with your mortgage broker to see if this is a ⁠option for you and your current mortgage product.⁠

Inflation is a scary term for many, but it doesn't have to be. Practicing good financial management can help put you in a better position both today and long term. Where there's a will, there's a way.

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