As one of those people blessed with a mortgage, I often realize the home I live in isn’t really mine, it belongs to the some corporation. I usually just let that thought pass but sometimes it a stark reality that hits me. When it does, I have this urge to put all my spare cash into one giant lump sum payment (sometimes called a privilege payment) towards my mortgage. I’ve done some quick calculations and I could lower my mortgage by a third if I did that. It would also leave me with pretty much no cash in any of my accounts. All I’d have left over would be some stock, mutual funds, and my RRSPs. All my money would be tied up in my home. If I needed money, it’d be pretty hard to sell off just a piece of my home for some cash. So because I’m scared, I haven’t done that.
I have, however, made one privilege payment towards my mortgage previously. It was a measly $2K. It was mostly a symbolic gesture. I made another such payment today. It was larger than $2K but not by much. I had to phone this request in. The customer service rep at the other end told me that after this payment, under the terms of my mortgage, I could only pay back a maximum of $36K towards my mortgage for the rest of this calendar year. I chuckled and told him that I would absolutely love to have that problem where I might have to exceed that limit. I wonder, who has that problem? Boo hoo, my mortgage terms only allow me to pay back $36K per year; but I want to pay more!
If any of you have run into such a financial hardship, please let me know.