Use Your Home Equity to Reduce Credit Card Debt
Many Canadians are taking advantage of refinancing some of the equity in their mortgage to reduce their credit card debt. Why pay high interest rates on your bank's credit card debt when you can add that debt to your mortgage and pay a much lower interest rate! One important part of a strategy is knowing "good debt" from "bad debt". A well-planned mortgage can help you turn those bad debts into good debts and get them out of the way.
1. Consolidate high interest rate credit cards to one lower rate.
2. Save money and increase cash flow.
3. Reduce stress knowing that your financial situation is now manageable.
If you'd like to have a conversation about refinancing your debt, give us a call today to review your options. It's time to beat the banks!
...drowning in debt? ...overwhelmed by current interest rates? ...getting calls from collection agencies? ...facing accumulating bills? ...overdue on your property taxes? ...behind in your mortgage payments?
Whether it’s a lost job, unexpected expenses, or overspending, people can get into debt trouble for many reasons. Fortunately, the experts at MSI can help those overwhelmed with debt to overcome the day-to-day financial stresses through debt consolidation.
Debt consolidation is about taking out an equity home mortgage loan to consolidate several unmanageable debts or refinance a first or second home mortgage. Through debt consolidation, you can remove the stress that multiple debts can cause by reducing them to one convenient monthly payment that’s often lower than those paid on multiple debts before consolidating because you are now using the equity “trapped” within your property. Essentially, debt consolidation can help to eliminate stress by allowing you to pay just one easy-to-manage low-interest monthly payment, which could save you money over the long term.
How can debt consolidation save you money and make your debt more manageable? Say, for example, that you have $75,000 in debt spread out over three credit cards at an interest rate of 18.9%. Assuming you have to pay four percent of the outstanding balance, it would take 247 months (more than 20 years) to pay off; you would have also handed over more than $48,000 in interest.
If you consolidated those three cards into an equity home mortgage loan, you would pay out a lot less in interest. That’s because the interest on a secured loan is much, much lower than what you’d pay on a credit card. If the interest on a five-year fixed rate is 3.99%, and you continue to only pay off the minimum monthly amount, it would take more than 160 months (13+ years) to pay, but you would only pay $6,700.00 in interest. That’s an overall savings of $41,300.
To reduce your debt even more quickly, you can take the money you save each month in interest charges and put it back into the equity home mortgage. Even without a change in lifestyle, this extra cash infusion onto your home mortgage loan will help you pay it off faster. That’s the joy of compound interest and a debt consolidation equity home mortgage loan.
The Advantages of a Debt Consolidation Home-Equity Loan
Refinancing to consolidate your debt is a great way to save money, allowing you to:
- Pay a significantly lower monthly interest rate
- Quickly eliminate credit card debt
- Deal with fewer total monthly payments
- Consolidate all debt into one easy-to-manage monthly payment
What can MSI do for you?
Because MSI agents are licensed and independent, they can draw from all lenders who provide a variety of mortgage products. Whether your credit score is perfect or you’ve had issues, or have even faced bankruptcy, a MSI agent can help save you time and money.
The debt consolidation specialists at MSI can help you obtain a financial solution that will not just make paying off your debts more manageable, but will also help you secure the lowest possible interest rates available.
Debt Consolidation: A Practical Tool for Refinancing
If you’re feeling overwhelmed by monthly bills and mounting interest charges, you might want to consider consolidating your debts. And there’s no better place to turn for debt consolidation than MSI. The licensed independent agents at MSI are dedicated to helping you secure the debt solution plan best designed to fit your budgetary and lifestyle needs.
Top Two Reasons for Consolidating Your Debt
Regardless of where the economy is heading, it’s not difficult to find people overwhelmed with debt or struggling to come up with money for day-to-day living. In most cases, for those that qualify, debt consolidation isn’t a luxury, it’s a necessity—and one of the most financially prudent and efficient ways to resolve your money troubles.
Lower Interest Rates – Consolidating your debt with a much lower interest rate means that if you don’t lower your monthly payments, you can pay down the principal much more quickly—years and years quicker, as history shows. This has the added benefit of allowing to you keep more and more of your own money.
Lower Monthly Payments – Thanks to lower interest rates, your monthly payments are also lower. As a result, you can either take that “found” money and either pay down your consolidated loan or use it for household expenses.
Ease of Bill Payment – Debt consolidation doesn’t just help you save time and money—it also helps streamline the debt repayment process. This has the added benefit of decreasing your financial stress.
Resolving Multiple Debt Issues with Debt Consolidation
Debt consolidation aside, refinancing can also help you pay off your home mortgage more quickly, which is especially prudent if your current mortgage is tied to unfavourable interest rates. At MSI, we can help you refinance your mortgage at the best rates possible. You can either pay off your mortgage as quickly as possible, or reduce your monthly payments and use the extra cash for other household and lifestyle expenses.
Consolidating First and Second Mortgages
Some people are house-rich and cash-poor. For this reason among many others, you might want to consider a second mortgage. Whereas a first mortgage refers to the primary loan assumed by the homeowner, a second mortgage loan allows you to use the equity you’ve built in your home and access the funds you need.
If you’re looking to free up equity in your home, a home equity line of credit (HELOC) is a flexible and easy way to access funds on an ongoing basis. With a HELOC, you can get a potentially higher credit limit and lower interest rate than credit card rates. And unlike traditional mortgages, there is no penalty for paying off all or part of the loan at any time.
Private Mortgages for Debt Consolidation
Unlike large banks and other lending institutions, MSI works for you. We understand your financial needs are not bound by regular banking hours, and that you may have to consolidate debt or access your home equity as quickly as possible. At MSI, our agents will contact you within 24 hours to start you on the fast task to getting your debt consolidation or refinancing approved.
What Do I Need for a Debt Consolidation Home Mortgage Loan
If you’re a homeowner and you wish to see if you qualify for a debt consolidation home mortgage equity loan or refinancing, contact MSI or apply by email – and a mortgage specialist will help set up an appointment for a personal consultation to review your options at your earliest convenience.