Mortgages are frequently used by people to purchase residential real estate. Some Alberta residents may wonder what options are available to them to pay off their mortgages more quickly following residential real estate transactions. However, many families may be balancing the desire to make extra payments with other financial priorities. While paying off a mortgage as quickly as possible can be a good idea, there may be some drawbacks worth considering.
There are several reasons any Alberta homeowner would want to make extra mortgage payments. Interest accumulates over time, so quick payments can lead to major interest savings down the line. By paying down a mortgage faster, a homeowner can also access equity more quickly. Early payments on a house also opens up certain financial options, such as taking out line of credit or refinancing.
However, there are some downsides to paying off a mortgage early. Those who have extra cash and choose to put it towards their home may face future financial challenges because of a lack of liquid assets. Homeowners may also be sacrificing the opportunity to reinvest their extra money. Those who do not have an emergency fund or who hold higher-interest debts should focus on basic savings goals before making extra payments on their mortgage.
There are many financial and legal considerations during all real estate transactions. It is worthwhile to consult experts on the best thing to do before, during and after purchasing a home or some other property. For legal issues, an Alberta lawyer with experience in residential real estate is a good resource.
Source: landlordology.com, "Pros and Cons of Making Extra Payments On Your Mortgage", Jimmy Moncrief Sponsored, Accessed on Oct. 24, 2017