If you’re looking to become a Liberty Village condo owner in Toronto’s hippest neighbourhood, here are some money-saving tips to keep in mind while you are shopping for the right mortgage. There a few great strategies to follow to save a lot of money on your interest over the course of your mortgage period.
Structuring your mortgage at the beginning will save you thousands of dollars in the end. Also, buying a condo or apartment in Liberty Village with an extra bedroom could allow for a roommate, which will help with those mortgage payments, thus making your new condo an investment property as well.
Annual Principal Pre-Payments
Getting a mortgage that allows you to make annual pre-payments against the principal is a shrewd way to pay off your Liberty Village condo sooner. Tax refunds, annual job performance bonuses, etc., can help make a dent in your principal amount. Most mortgages will allow for a 10-20% allowance for this type of pre-payment.
Shorten the Amortization Period
The sooner you pay off your mortgage, the more money you save on interest over the life of the loan. Reducing the amortization period by five or ten years can save you over $100,000 in interest on a $300,000 condo purchased in Liberty Village, or any other trendy neighbourhood in Toronto.
Make Payments More Often
Increasing the frequency of your mortgage payments will accelerate how fast you can pay off the mortgage. Accelerated payment frequency is an option you can choose with your lender, and although it means a little bit more money per month, it also means big savings down the road.
Renting a Room
While you are shopping for the right mortgage structure, be sure to shop for the right condo too. Having an address in Liberty Village in Toronto is a sought after commodity for the in-crowd. If you are ready to purchase a Liberty Village condo, you may want to consider buying one with an extra bedroom to help with those mortgage payments. Especially if you structure it over a short amortization period, accelerate your payment frequency, and are planning on making annual principal pre-payments. Having that extra income every month will help you reach your financial goals sooner.
There is a lot to consider when buying a property, and it’s not just location, location, location. Mortgage rates and structures are just as important as having that hip and trendy address in Toronto’s Liberty Village. Choosing the right structure for your mortgage can save you thousands of dollars, and having a roommate help with the payments can make the dream of owning a condo in Liberty Village a reality.
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