Homeownership can be a very rewarding experience. Take the time to understand your responsibilities and plan for the future.
Make your mortgage payments on time
You can set up your mortgage payments to be paid weekly, bi-weekly, semi-monthly or monthly. You can have the payment automatically deducted from your account – take advantage of this flexibility to coincide with your pay deposit. This will help you easily make your mortgage payments on time. It is recommended that you keep at least three months’ worth of mortgage payments in savings for an emergency situation.
No matter what frequency you have chosen, it’s important to always make payments on time. Making late payments is called delinquency, which may result in late charges and negatively affect your credit rating. Failing to make payments can even lead to very serious consequences, like foreclosure.
Plan for the costs of operating a home
Operating a home has many other ongoing costs in addition to paying your mortgage, property taxes and home insurance. Maintenance and repair costs are at the top of the list. There may be other costs such as snow removal, gardening, a security system, etc. If you have a condominium, some of these expenses may be included as part of your monthly maintenance fee.
Save for emergencies
To be prepared for emergency expenses, set aside an emergency fund to deal with unexpected problems, such as repairs, illness or job loss. A good guideline is to save five per cent of your take-home pay and to keep the money in a special account.
Live within your budget
Prepare a monthly budget and stick to it. Take a few minutes every month to check your spending and see if you are meeting your financial goals. If you spend more than you earn, you must find new ways to save. If you are having trouble sticking to your budget, ask a Financial Planner for help.
Tatum Neufeld, BComm
Mortgage Broker • Mortgage Tailors