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Most people want their mortgage to be paid off.

While in some cases, if the after tax debt costs are low enough, and there are alternatives to use that cash for higher growth, then having a mortgage can actually add to your wealth.

Nevertheless, for those who want to be mortgage free, here are a few essentials to empower you in the mortgage process.

1. A rate is a rate, is a rate, right?
   Most Canadians will secure a mortgage exclusively by trying to find the lowest interest rate.  While the interest rate is very important, the majority of Canadian will have to break their mortgage and pay a significant penalty because of the conditions that were attached to that great rate.  Don’t treat your mortgage like a commodity.  The structure of your mortgage and what you would like to achieve with it is more or equally as important as the interest rate for it.
2. What is the plan for your mortgage
   Do you have an accelerated plan for your mortgage?  You should not just put your mortgage on auto-pilot and resign to the amortization that was set for you by your lender.  Have a goal to pay it off faster.  Your mortgage plan should fit into your overall life plan.  Many people try to be mortgage free at all cost and by doing so they neglect their greater financial plan.  By doing so they end up having to raise a mortgage in their old age to support themselves.
3. Just sign the mortgage offer
   85% of Canadians sign the mortgage offer that is presented to them by their financial institution.  We have great financial institutions in Canada, but they don’t have natural incentives to provide borrowers with the lowest interest rates.  It is up to each borrower to make sure that they have the best interest rate for their conditions.  Look at all your options and don’t be afraid of the small mortgage lender that will provide you with excellent products.
4. Can a refinance get you ahead?
   Many people are afraid of refinancing their mortgages because of the penalties associated with it.  What if this could be done by keeping your payment the same and reducing your mortgage by 5 years?  Before you decline the opportunity to refinance your mortgage or just rush into it allow a professional to do the benefit analysis for you.  If you do it for the right reasons you could save tens of thousands of dollars and reduce your mortgage by many years.

Article submitted by Jacques du Preez of Mortgage Allies jacques@mortgageallies.ca 1-888-707-4995