Friday, 21 December 2012

Mortgage repayment tips - part 5

This is the last of a five part series on mortgage repayment tips.  Today’s topic is “Eliminate (or at least manage) fees and charges.”

Fees and charges may seem trivial relative to the size of your mortgage, but over time they can add up, as I explained previously:
http://www.millionaireonheels.com/2012/12/the-things-banks-and-brokers-dont-tell.html

The best time to negotiate fees is before you sign the mortgage contract.  Remember every fee is negotiable.  Sometimes lenders will waive annual package fees or at least the application and settlement fees for a new loan or refinance.

Also, at the time of application, it is helpful to think ahead as to how you want the loan structure to look in the future.  Some loan features may be free at the time of application, but cost several hundred dollars after settlement – e.g., loan splits.  If that’s the case, consider taking the features even though you don’t need them yet.

Finally, once your loan is settled, ensure that you manage your ongoing fees diligently.  If you have a package loan, you shouldn’t have too many fees, but check your loan statement for any errors.  On my current loan, the package fee is meant to be waived, but in practice it never is, and I have to ring up every year to have it reversed.

This just about concludes my series on mortgage savings.  Tomorrow, I’ll conclude with a final post on mortgage tools and resources.