Everyone wants to get the best mortgage financing offer. Does that mean getting the lowest rate, the longest term or the smallest payment? The best strategy for one person isn’t necessarily right for another.
Mortgage renewal is the perfect time to reorganize your finances based on your life goals. Your plan will be different, depending on whether you want to pay the lowest interest possible, reduce your monthly payment, save for a special project or optimize your debt repayment.
Here are 3 things to consider before settling on a mortgage agreement that’s right for you.
- Your financial commitments
To find out how much flexibility you have with your budget, calculate the monthly payments for your:
- Credit cards and lines of credit (monthly minimums)
- Personal loans (e.g., student loan)
- Other payments, like child support
Note: no more than 40% of your gross household income should go to all of your financial commitments, including your mortgage payment and other home-related expenses (e.g., property taxes, school taxes, energy costs).