13 Common Money Mistakes to Avoid in 2013

Common money mistake...

Spending prior to earning...

US Mortages can be paid off and refinanced with another institution. Depending on the amount of money this can cost you $10,000. The company I was with in the states had a "Mortgage adjustment" option that cost $500 and it would let you drop as much as 3 points but you could only do it once every 6 months.

In Canada you can't pay your mortgage off early without penalty but unlike US mortgages Canadians have mortgages that last only 3 - 5 years despite being amortized over 25.

There are other options to Canadian Mortgages that sometimes make more sense than paying an exit fee. Most mortgages allow you to doube the amount of your payment which is great as it goes directly to the principal. The second benefit of this is that your next months payment goes even further towards debt reduction since there is less principal owing. (ie the interest portion of your payment is less). Many mortgages also allow you to make a years worth of mortgage payments in advance and they allow you to pay down your mortgage by 10% of the orginal principal.

OK the catch is you need money to do this....and with a high interest mortgage where do you get the cash to do it....

The strategy here is that if you have a high mortage rate you can usually get a home equity loan at a lower rate. Ie Prime or Prime + 1. You use this loan to "prepay" a years worth of double mortgate payments and the 10% bonus payment your allowed. You end up owing the same amount of money except your payment is now reduced. signficantly as you have two loans at two different interest rates (one being a lot less than the other). When your mortgage renewal comes up in the 3 - 5 year range you simply collapse these two together at the lower interest rate. If by chance rates go up you still have had the benefit of a lower rate for a period of time.

If your mortgage is up for renewal now or soon it can be free to redo it in Canada. Virtually, you just need to do the math and perhaps in some cases it may make sense to pay a penalty, which in some cases can be added into the mortgage. But, billdfalls is right in the respect that it is not as easy as in the US where you are allowed to refi up to 97% of the value of the home.
It is a lot more conservative here in Canada, where you can only access up to 80% of your equity on a refinance. You need a minimum of 5% down even to buy.
Kelly Rowe

#7 -refinancing your mortgage in Canada is not that easy or cheap to do like the US. #12 -credit history or credit score refers to going to a Government website to check it this again must be US.