It's been all over the news lately that the Bank of Canada intends to increase mortgage rates. While this sends most mortgage- toting homeowners into a panic, there are ways to prevent this increase from posing a problem to your financial situation. See below for some simple tips to help you reduce your money worries.
1. Lock in mortgage rates & credit lines
Prevent an increase in rates (and stress) by locking in your rates for a set period of time. Speak with your bank and/ or financing provider to work out the details. If rates fluctuate ( ie increase) you will be locked in at the previous lower rate, mitigating against the financial worries of a rate increase.
2. Set up an emergency savings fund
If you haven't already done so, make sure you have some savings to fall back on. Put aside a portion of your monthly income to deposit into your emergency savings fund. You can make this a set monthly amount or a percentage of your net income, whichever you're more comfortable with. This will help during tough months when/ if money gets tight.
3. Cut back on expenses
How often do you buy a coffee? Lunch? A snack on the go? Resist the urge to spend on these unnecessary expenses and put that money towards other things. It may not seem like a lot at the time, but when you get your monthly bill you can 'nickel and dime' yourself into a large amount of extra spending that wasn't necessary.
4. Make paying down debts a priority
We know it isn't fun to spend money on debt, but it can save you a lot of money in the long run. Figure out what your largest/ most expensive debts are and work down the list. Prioritize which debts you want to focus on paying down first. It may help to speak to a financial advisor to help you determine where you should focus on first. Debts with hight interest rates are often the first thing to be addressed, as these can be very expensive in the ong run without making a large impact on the principal cost.
Have questions about mortgage rates and how this can affect you buying a home? We're happy to answer all of your questions and put you at ease during your buying & selling experience. Contact us today with your questions and to schedule a meeting to help you get ready to buy or sell.
Image Source: Infinity Investment Group