May sound like a silly question, but what’s the difference between a mortgage payment and paying rent?

They can both occur on the exact same day, but there is a subtle difference.

Of course, we all know that a mortgage payment is for a mortgage and rent is for rent, but is that it?

Yes, mortgage payments can be accelerated and you deffinately own the property versus just renting it, but one of the key differences consists of what time frame that payment covers.

You see, when you pay rent, it’s what I call ‘Pay & Stay’, whereby you’re pre-paying for the upcoming month. For example, you pay your rent on March 1st for the month of March. Whereas, when you pay your mortgage, it’s what I call ‘Stay & Pay’, whereby you’re paying your mortgage payment for the month that has just passed. For example, you make your mortgage payment on March 1st, but it’s actually for the month of February.

If you have a mortgage, you’ll probably remember that when you first got it, your first mortgage payment didn’t take place until a month after you had owned the home.

Often when I’m helping a client save money on their mortgage with either a refinance or a switch, they’ll ask if they should make their upcoming payment. They’re often surprised when I tell them that the upcoming mortgage payment is for the month that has now passed, not for the upcoming month.

As you can see, there’s a lot more to mortgages than just great rates.

For the right advice, At the right time, you know the drill, 604-273-2002

Mark Fidgett is a Vancouver mortgage broker and the driver behind www.NotaPennyDown.com

Your Vancouver Mortgage Broker For Life

www.notapennydown.com

P.S. Who’s the next person you know who wants to save thousands off their mortgage? Be sure to give me a call so we can help them! 604-273-2002

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