Dominion Lending Centres: 5 Questions Mortgage Borrowers Should Ask But Often Don’t

1. If I have mortgage default insurance do I also need mortgage life insurance?
Yes. Mortgage life insurance is a life insurance policy on a homeowner, which will allow your family or dependants to pay off the mortgage on the home should something tragic happen to you. Mortgage default insurance is something lenders require you to purchase to cover their own assets if you have less than a 20 per cent down payment. Mortgage life insurance is meant to protect the family of a homeowner and not the mortgage lender.

2. What steps can I take to maximize my mortgage payments and own my home sooner?
There are many ways to pay down your mortgage sooner that could save you thousands of dollars in interest payments throughout the term of your mortgage. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20 per cent of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage). Another way to reduce the time it takes to pay off your mortgage involves changing the way you make your payments by opting for accelerated biweekly mortgage payments, which will not only help you pay off your mortgage more quickly but will also save you a significant amount of money over the term of your mortgage. Visit me to find out which strategy suits your specific needs.

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