Your home isn’t just a place to live, it’s also potentially the largest single investment you’ll ever make, and that’s worth protecting. Here are a few ways that you can ensure that the investment in your home remains financially healthy:
#1 - Make mortgage payments on time.
It’s important to make your mortgage payments on time. If you don’t, it will negatively affect your credit score in the short term. And in the longer term, it could lead to a ‘default’ on your mortgage. You can make manual payments directly through online banking, but we recommend setting up pre-authorized monthly mortgage payments, so you don’t have to remember.
#2 - Create an emergency fund.
An emergency fund is money set aside only for unforeseen emergencies such as an illness or loss of job. During this challenging time, it can help you meet your financial needs and obligations, like mortgage payments, bills and food. Here’s how you can start saving:
- Calculate your monthly income and expenses
- Set a monthly goal (Example: 1.5% of your monthly income)
- Set aside funds in an accessible and separate place than your main bank account
- Emergencies aren’t a once in a lifetime occurrence so always be saving
A good way to save your emergency fund is through a Tax-Free Savings Account. That way your money will grow tax free and can be withdrawn when you need it.
#3 – Invest in your home.
Home improvements are a great way to increase the resale value of your home. It also tells your neighbours that you take pride in both your home and community. Some improvements, like fixing your roof or eavestroughs, may not look flashy but protect your investment, while others allow you to see the value of your home increase before your eyes, like a kitchen or bathroom renovation. If you don’t have the funds on-hand, here are a few ways Northern can help you manage your reno costs:
- Purchase Plus Improvement Mortgage – If you’re buying a fixer-upper, ask us how you can roll your renovation costs into your overall mortgage amount.
- Home Equity Loan – If you’ve already purchased your house, you can borrow money secured against the value of your property to get a lower rate.
- Mortgage Refinancing – If your home has increased in value, you can refinance your mortgage to access equity to put towards your home improvements.
- Personal Loan or Line of Credit – These are other great options that come in both secured and unsecured and have lower interest rates than credit cards.
- Credit Cards – This option is good for quick, small renovation expenses. Just make sure you pay off your credit card balance as soon as possible.
#4 – Purchase home insurance.
Home insurance is, perhaps, the best way you can protect the investment in your home. Also, most mortgage lenders require proof of home insurance before advancing a mortgage. Home insurance may differ from insurer to insurer, but typically it protects your home and its contents from unforeseen calamities, like fire, theft or natural disasters. It also usually provides homeowner liability coverage.
#5 – Live within your budget.
Living within your means is the cornerstone of your financial health. Put simply, it means you spend less than your net monthly income. As straightforward as this sounds, achieving a balance of spending and earning can be challenging. Your best bet is to create a monthly budget and try to stick to it. That way you’ll have a clear idea of your monthly expenses, spending, saving and how much money you have for non-essentials.
If you have any mortgage questions or need a hand financing your renovations, just give us a call at the True North Hub at 1-866-413-7071 or book an appointment with a Mortgage Expert.
