The holidays are a season of giving, and households can often carry some extra debts as we enter the New Year.
Many struggles with some post-holiday debts. Whether you have accumulated multiple points of debt from credit cards or are dealing with other loans (such as car loans, personal loans, etc.), you are likely looking for a way to simplify your payments and reduce them. Rolling them into your mortgage could be the perfect solution.
Consolidating other forms of debt into your mortgage has multiple benefits. This process can help you pay off your loans with smaller monthly payments over an extended period and often at a reduced interest rate compared to a credit card.
You will have better monthly cash flow if you free yourself from these high-interest rates and gouging interest payments. You also have a better chance of regaining financial control and getting your loans paid off completely.
If you are still uncertain if this is the right solution for you, here is an example: If you have $30,000 of credit card debt, you are probably paying at least $600 per month, and $500 of that is likely going directly to the interest. If you roll that debt into your home equity and monthly mortgage, your payment to this $30,000 portion will decrease to around $175 per month, with interest charges closer to $140 per month. That is huge in interest saving.
Debt consolidation into your mortgage can help reduce interest charges and make your loan more manageable. It is much easier to keep track of and pay a single monthly instalment versus managing a dozen different loans or bills.
While debt consolidation through refinancing will increase your mortgage amount, the many benefits of lowering your overall payments and managing your debt can be well worth it when it comes to cost savings, time, and stress. Lastly, you will need at least 20% equity in your home to qualify for this adjustment.
Contact me if you want to simplify or get out of debt! I would be happy to visit your financial portfolio and current mortgage and help you find the best option to suit your needs.