Debt Consolidation

5-Benefits-of-Debt-Consolidation

If you’re looking for a better way to manage your cash flow and reduce your debt faster, you should consider consolidating your loans into a debt consolidation mortgage. With consolidation, all your loans are placed into one simple loan payment. There are many ways that this can help you can improve your financial situation. Here we look at all the benefits of debt consolidation and the ways it can help to make your life easier and put some money back into your pocket.

Reduce Interest Costs

By consolidating your debt, you will have the opportunity to obtain a much lower interest rate than what you were paying with combined balances. The lower interest means you will have lower monthly payments. This will be beneficial to those who are struggling with their regular monthly payments or for those who would like to pay back their debt faster.

Avoid Credit Card Debt

Let’s face it, credit cards come with some really high interest rates. If you consolidate your credit card balances into one favourably low rate, you will save money on your overall monthly finance charges.

Simplify Payments

Having numerous debts can get confusing when it comes to managing all the different payments. Plus, if you accidentally miss a payment you could be left with high fees to pay and damage to your credit rating. With consolidated loans, you have one easy payment each month, which is much easier to manage than multiple ones.

Help to Track your Balances

It’s often difficult to know your exact balance when you have multiple loans – rarely are they posted in one place. Not only is this bad for tracking purposes but can also make it difficult to understand exactly how much money you owe. Having one balance through one institution will help you to track your debt more clearly.

Eliminate High-Interest Debt

By merging some of your debt into one loan, you can turn around and pay off some of those higher interest loans, like credit card debt, to save money. This means moving over all amounts to the consolidated lower interest rate loan so you now will have interest building on the new rate and instead of the higher rate.

Debt consolidation can help you save money and reduce your monthly payments. With so many benefits of consolidation, talk to your Financial Forum mortgage broker who can help you better manage your finances and put you on the right track to a debt free life.

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With the new rules and regulations introduced late 2016, together with the so called “Trump” factor and all else going on with bond rates and the overall economy, are rates on the rise? Perhaps, but no certainty. We have seen an increase since late last year, but for now, it seems to have tapered off.

Regardless, looking at your situation and overall short and long term needs is never a bad idea.

Should I Refinance?

For many, this does make a whole lot of sense. With home values having increased, dramatically in some areas, and continuing to rise, refinance can provide homeowners access to their equity. Why? Well most have many ideas where they can use freed up funds, especially if its economically viable to do so. It could be for debt consolidation, home improvements or just about anything else you can think of.

For those with second mortgages, credit card debt, student loan debt, refinancing usually provides an amazing remedy. With the equity in property built by paying down the mortgage, together with the increase in property value, many now have the possibility of entertaining refinancing as an exit plan from their current financial situation.

The key to this in my opinion is having at least 20 percent equity in your property post refinancing. There are financing programs that can take you beyond the 80 percent level, but they are more expensive and usually will not put you in a better position. So, if you have sufficient equity to leave at least 20 percent equity in your property post refinancing, it’s something you could be considering.

Re-Structuring

Some wish to refinance simply for the purpose of re-structuring their current mortgage situation. Perhaps they can arrange things at a lower rate, with a lower amortization to pay the mortgage off much faster. Or they wish to align their pay back of the mortgage to a certain date, such as a retirement date. You can set your pay off date to a retirement date, or date kids are off to college, university, etc.

Generally speaking, any time you shorten the term, you save on interest payments. Couple that with a lower rate and it becomes even more impactful.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

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Are you looking to get away from a high interest mortgage? Maybe you would like to pay your mortgage down faster? How about consolidating some credit card debt and improving your cash flow? Some home improvements? Refinancing with the equity in your home could provide a very effective solution for you.

Rates have creeped up a bit over the last couple of months, but they are still pretty low. This means that you could benefit from a lot of savings if you are considering refinancing. Depending on your needs and goals, refinancing could make a lot of financial sense and impact.

Here are some great reasons to consider refinancing in 2017

High Interest Rate On Current Mortgage

Have a look at your rate vs. what is available in the market today. Are you paying too much? It’s a great idea to visit your mortgage annually, even if you are in a locked term. There may be better options for you to consider.

The good news is that you’re not necessarily stuck in your mortgage to term. Yes, there may be penalties. But sometimes, it’s wiser to take some pain for the ultimate gain.

Consolidate Debt

Let’s face it, credit cards and lines of credit are not meant to carry balances. Furthermore, in most cases, the interest rate is ridiculously high. Remember that coffee table you purchased at such a great price? How much will it cost you by the time you finish paying it off? If you have credit card and other debt in the thousands of dollars following the holidays, those interest charges can add up quite quickly.

This is where you can use your home equity to your advantage. If you want to consolidate your credit card debt, it makes a lot of sense to cash out some of the equity in your home. Interest rates on mortgages are typically much lower than the interest you would pay on your credit cards if you had to carry a big balance over time.

This is a great way to get yourself in better financial shape if you’re looking to cut down your debt charges.

Fund Your Investments, Requirements

Yes, our home is our major asset and paying it off should be a primary goal. However, there are other things in life that come up. You can use the equity to your advantage for any number of things.

If your retirement fund needs a boost, a cash-out refinance can be a great way to make that happen. How about that investment property or second home you have been thinking about? Sending your child to college or university? Perhaps it’s time for a major renovation or addition? It might just be that your home is tired and needs a major upgrade such as windows, doors, a new roof? Your equity can give you the funds you suddenly need or that you have been planning for.

Yes, interest rates have increased slightly, but still pretty low. This makes refinancing still a very viable option for many and it could be that way for you.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

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Have interest rates fallen? Or do you expect them to go up? Has your credit score improved enough so that you might be eligible for a lower-rate mortgage? Would you like to switch into a different type of mortgage? How about consolidating some high interest debt or perhaps you require some funds for renovations, child’s education, etc.

The answers to these questions will influence your decision to refinance your mortgage. But before deciding, you need to understand all that refinancing involves. Your home may be your most valuable financial asset, so you want to be careful when choosing a lender or broker and specific mortgage terms. Remember that, along with the potential benefits to refinancing, there are also costs.

When you refinance, you pay off your existing mortgage and create a new one. You may even decide to combine both a primary (first) mortgage and a second mortgage into a new loan. Refinancing may remind you of what you went through in obtaining your original mortgage, since you may encounter many of the same procedures—and the same types of costs—the second time around.

Why consider refinancing?

Lowering your interest rate

The interest rate on your mortgage is tied directly to how much you pay on your mortgage each month—lower rates usually mean lower payments. You may be able to get a lower rate because of changes in the market conditions or because your credit score has improved. A lower interest rate also may allow you to build equity in your home more quickly.

For example, compare the monthly payments (for principal and interest) on a 5-year fixed-rate loan of $200,000 at 2.99% and 3.49%.

Monthly payment @ 2.99%          $945.57

Monthly payment @ 3.49%          $997.49

The difference each month is      $51.92

But over a year’s time, the difference adds up to                $623.04

Over 10 years, you will have saved           $6,230.40

Adjusting the amortization (length) of your mortgage

Increase the term of your mortgage: You may want a mortgage with a longer term to reduce the amount that you pay each month. However, this will also increase the length of time you will make mortgage payments and the total amount that you end up paying toward interest.

Decrease the amortization of your mortgage: Shorter amortized mortgages—for example, a 25-year amortization instead of a 30-year amortization. Plus, you pay off your loan sooner, further reducing your total interest costs. The trade-off is that your monthly payments usually are higher because you are paying more of the principal each month.

For example, compare the total interest costs for a fixed-rate loan of $200,000 at 3% for 25 years with a fixed-rate loan at 3% for 30 years, both over a 5-year term.

Monthly payment            Total interest (5 years)

25-year amortization @ 3.0%      $946.49                                 $27,738.70

30-year amortization @ 3.0%      $841.21                                 $28,224.68

Changing from an adjustable-rate mortgage to a fixed-rate mortgage

If you have an adjustable-rate mortgage, or ARM, your monthly payments will change as the interest rate changes. With this kind of mortgage, your payments could increase or decrease.

You may find yourself uncomfortable with the prospect that your mortgage payments could go up. In this case, you may want to consider switching to a fixed-rate mortgage to give yourself some peace of mind by having a steady interest rate and monthly payment. You also might prefer a fixed-rate mortgage if you think interest rates will be increasing in the future.

Getting an ARM with better terms

If you currently have an ARM, will the next interest rate adjustment increase your monthly payments substantially? You may choose to refinance to get another ARM with better terms. For example, the new loan may start out at a lower interest rate (greater discount based on the prime lending rate). Or the new loan may offer a “cap”, which means that the interest rate cannot exceed a certain amount.

Getting cash out from the equity built up in your home

Home equity is the dollar-value difference between the balance you owe on your mortgage (s) and the value of your property. When you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment (this is called a cash-out refinancing). You might choose to do this, for example, if you need cash to make home improvements or pay for a child’s education.

Remember, though, that when you take out equity, you own less of your home. It will take time to build your equity back up. This means that if you need to sell your home, you will not put as much money in your pocket after the sale.

If you are considering a cash-out refinancing, think about other alternatives as well. You could shop for a home equity loan or home equity line of credit instead.

STEP BY STEP GUIDANCE!

  • Your Financial Forum advisor will help establish a game plan to help you to achieve your short and long-term goals.
  • We’ll keep you informed of industry trends and home financing options along the way. We’re always tracking current mortgage rates, and various options available in the marketplace
  • We are always available to deal with any of your questions
  • We grow by referral, therefore treating you right is the most important thing to us.

If you think you’re ready to get started with refinancing, let us know and we can set up a free consulting session for you.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

VERICO The Financial Forum Ltd.

“Your Connection To A Better Mortgage”

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Do you know what makes up the majority of revolving debt for most consumers? Credit cards

Probably not a surprise, but the appetite for credit cards continues to grow, and it shows no signs of changing.

For many, debt gets to a point where is suffocates you, it becomes overwhelming, it controls you and becomes a major point of stress. It could even replace another four letter word we often hear. Debt, when left unmanaged, is toxic and can bring individuals and families crumbling to their knees. But, there is a choice and there is a solution, if you are willing to face the facts and conquer your fears. If you are looking for a solution, a debt consolidation mortgage may help you get back on track provide the peace of mind you deserve.

What Is A Debt Consolidation Mortgage?

A Debt Consolidation Mortgage is a way for you to take your high-interest credit card debt and other debt and combine it into one monthly payment, together with your existing mortgage or as a separate mortgage. But, just because it sounds good, doesn’t mean it is. You must be certain that the new structure will not only improve cash flow, but also does not take so much longer to pay off the debt that it nullifies all of the savings.

Regardless, if you’re paying on multiple credit cards and only making the minimum payments each month, your interest is going to add up and debt reduction to any significant extent is virtually impossible. Typically, consolidating your high-interest debt allows you to make one monthly payment, save money in interest and pay off your debts in a shorter amount of time.

How Should You Prepare For Debt Consolidation Loan?

Credit

When you apply for a debt consolidation mortgage, the lender is going to check your credit report and score, so it’s a good for you to have a handle on where you stand. If there is anything you can do to enhance your credit in advance, you will have more leverage on the interest rate and other terms of the debt consolidation mortgage. The better your credit, the higher your chances of securing the best rate.

Check for inaccuracies and errors

You have the right to dispute any inaccuracies and errors on your credit report. If there’s inaccurate information or something on your report that does not belong, take it up with the credit reporting companies (Equifax, TransUnion). Ultimately, inaccurate information on your report may be holding you back from a better interest rate.

Timely payments

Paying your bills on time, every time will help your credit. Even if you can only make the minimum payments, it’s extremely important that you make your payments on time.

Is debt consolidation right for you?

Debt consolidation isn’t right for everyone. Figure out the current and post scenarios to see if a debt consolidation loan will work for you. You’ll also want to be sure to read the fine print – there may be fees attached to the loan you that you didn’t know about. You must factor in the interest rate, and all fees to determine your savings, if any. You must also calculate how long it will take you to pay off the debt consolidation mortgage vs. how long it would have taken you to pay off the existing debt. Remember, if an offer sounds too good to be true, it probably is.

Whether you choose to entertain a debt consolidation mortgage or not, you need to make sure you have a game plan for how you’re going to get out of debt. You need to know where your money is going each month and make a plan to get your debt paid off in a reasonable time. Doing nothing is not an option.

What Now?

Instead of letting your mortgage continue to be part of the problem, you can make it a key in your plan to get out of debt. How?

Mortgage rates are currently very low. This means you can roll your debt into your mortgage and pay a much lower interest rate. It’s a type of cash-out refinance where you use the existing equity built up in your home to pay off debts.

The Benefits of Debt Consolidation:

  • Multiple payments and creditors into one manageable payment
  • Can reduces higher interest rates
  • Can brings credit cards and other debt to zero
  • Lowers the amount of interest you pay
  • Improves your credit rating

When to Consolidate

  • More than 10 percent of your take-home pay goes for non-mortgage debt (including credit cards, student loans, car loans and personal loans)
  • You struggle to meet your monthly payments
  • You have been unable to invest in a savings plan
  • You have debts carrying an interest rate of 10 percent or higher
  • Mortgage rates are lower than rates on your other financing options

If you have debt that’s bothering you, remember to look at all your options. It may be easier than you thought to get out of debt. For more info on debt consolidation and cash-out refinance, give us a call or send us an email.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

VERICO The Financial Forum Ltd.

“Your Connection To A Better Mortgage”

Together, We Make Mortgages Easy!

Who does not fear risk? We all do, and lenders are no different. While risk is an inherent part of business, a lender will choose risk wisely and prudently, especially when they have a choice to lend on multiple applications.

Understandably, many mortgage companies are reluctant to finance people with bad credit history or with little or low down payment. This is where a mortgage broker experienced with bad credit mortgages comes in. A bad credit mortgage can assist people who have bad credit score, low income, or a long history of loan rejections.

Mortgage Miracle Worker?

Not really. A mortgage broker should provide sound advice and options to you to assist you while things are not so favorable and help you to create an “exit plan” so that you can move back to conventional lending in the shortest period possible. Entering into a bad credit mortgage with no exit plan in place is never a good idea.

A mortgage broker experienced with bad credit mortgages can help you get your loan approved by mitigating circumstances and negotiating terms and conditions that make the loan viable to both you and the lender. Make no mistake, however. While a bad credit mortgage can seem like a miracle, it comes at a price. You will have to expend more money to get a bad credit mortgage. Ultimately, the loan you will qualify for will have a higher interest rate and closing fees.

When contemplating a mortgage when you are in this situation, you must evaluate your own risk reward, or more accurately, extra costs vs. potential rate of return. Will you be better or worse off?

You must also have or create an “exit plan” before you engage. By that I mean, you must set a goal to either be able to pay this loan off within a certain period or work on your credit issues, income issues, etc. so that you can qualify for a regular mortgage in the shortest period possible.

Is Your Broker Trying to Break You?

Do higher interest rates and closing fees mean your bad credit mortgage broker is pulling a fast one on you? Not at all, providing they are helping you solve the existing problem and are helping you with the short and long term picture. Mortgage brokers essentially provide a liaison between lenders and borrowers. The cost of money in this situation is higher. Mortgage brokers do not necessarily get paid more for a bad credit mortgage. The cost of money is simply higher and lenders usually charge a lending fee for these types of mortgages. However, mortgage brokers may have to charge you a fee for these types of mortgages whereas with conventional, qualified mortgages, they may not as they would receive compensation directly from the lender.

This is standard practice in the industry. You have to remember that your bad credit history makes you a greater risk than most. The only reason mortgage companies would willingly take on the kind of risk you represent is if it proves profitable for them in the end.

The Pain of Penalties

Some bad credit mortgage loans carry a pre-payment penalty. Therefore, again it is important to establish your exit plan and set your term accordingly. There is no sense paying a higher rate for 5 years when you can improve the situation in 1 or 2 years just because the present rate may be lower for a longer term. Again, this is an unavoidable pain in the neck for people with bad credit. Always opt for the loan with the shortest term that is closest to your reasonable exit plan. This way, you can pay off the loan quickly without penalty.

Don’t Worry, Just Wait

What if the rates prove too high for you? You have another option. Wait. It’s been said the best things in life are worth waiting for, and this mantra holds true for getting a mortgage even with bad credit. Wait a while before you contact a bad credit mortgage broker. Use the time on your hands to improve your credit score. When you’ve successfully done this, you can then qualify for a loan with a lower interest rate.

We can provide some free advice on how to improve your credit score. Just ask us!

Risk is terrifying, but it’s unavoidable. In applying for a mortgage, a bad credit mortgage broker can give you a makeover – from being a walking liability to a sound investment.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

VERICO The Financial Forum Ltd.

“Your Connection To A Better Mortgage”

Together, We Make Mortgages Easy!

 

 

 

Doesn’t matter what education level or career path you chose, everyone longs for financial security and financial freedom for retirement. When you are young, 30 and 40 year olds seem very old, over the hill and past their prime. However, time passes quickly and you will soon realize how young 30 is, yet how fast you reached this age.

Feeling young also means putting things off. That “forever young” feeling is quite common and leads many to putting off setting their financial goals or if set, working towards achieving them. It’s important you set your finances up early, and work towards your milestones as diligently as possible.

Getting on the right track involves a look at many aspects of your life. However, here are a few pointers to set you off in the right direction.

Contribute Regularly to your RRSP

Time is only your friend when you take advantage of it. Start early and start contributing a set amount of your earnings towards your RRSP. Do this with your regular pay intervals rather than at the end of the year when you have to write a big cheque. This will ease the burden and allows you to harness the power of compounding interest.

As a rule of thumb, set your goal to have 50 percent of your current annual salary invested into RRSP’s by age 30. Regularly visit and tweak your contributions so that you are able to achieve this goal.

Pay Yourself First

Set aside part of each pay for a savings plan. This could go in to a TFSA account or even just a savings account. Regardless, ensure that you set up a savings plan and that you always have funds set aside to cover emergencies or expenditures without having to go into debt. Credit Cards are not meant to carry balances. They should be paid in full each and every month. Start small and work your way up. Your initial goal should be to have 3 months of living expenses saved. Once you reach this goal, work your way to 8 months, then 12, etc.

Set A Goal Of Buying Your First Home Rather Than Renting

Even if it makes more sense for you to rent, rather than own, save for a home purchase, even as an investment. Owning a home is forced savings and builds equity. Even if prices do not appreciate, with today’s low rates, you are paying a considerable portion of the mortgage off each and every month. Real estate prices do in fact increase however, which will make you realize even a higher gain on the investment. Renting year after year will result in no gains and after tax expenditures for rent with nothing to show for it.

Debt Can be Your Enemy

Many people, especially the young, have a hard time managing their credit card and other debt. Ensure part of your goals is to have debt fully under control. Keep your loans to a minimum and do not carry balances on credit cards. If you find yourself purchasing items on credit cards and not being able to pay them off the next month, something is wrong and needs to be re-visited. Budgeting is key.

Set Up Your Life Insurance

Sure, no one bothers to think about this in their 20’s. But, setting up a plan based on future requirements early will save you thousands of dollars over the years.

We won’t know what life will throw at us. But planning ahead, setting your goals and monitoring your game plan will go a long way in making your future much brighter.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.

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Many people have a pretty good understanding of how the mortgage process works at the beginning. You apply, collect the necessary documents, put up your down payment, sign up for a 5 year fixed or variable term and off you go (obviously it is a little bit more complex, that is just the coles notes version). But what do you do once your 5 year term is expiring and your mortgage matures? This is known as the renewal process, and this is when you have a few different options and you should know how to navigate them properly.wallet 1

Since your mortgage is maturing, this is an opportunity to reassess your situation and if you need to refinance, now is the time as there is no penalty to break the mortgage seeing that your term or contract is now up. This is usually how the process works:

About 3-4 months prior to your mortgage maturing, you will begin to receive notice from your existing mortgage lender about renewing your mortgage with them. At this time, you should start looking at your options and asking a few questions:

  • Are you happy with the service you have been getting with your current lender?
  • Are they offering you a competitive rate?
  • Do you need to take out extra money from your equity to pay out debts, to refinance, invest elsewhere or any other reason?
  • Has there been any major changes since the time of your last mortgage or will there be in the near future? Like a growing family? New job or loss of job? These are things you need to consider.
  • Are you planning to move or sell your home in the next few years?

If any of the above apply to you, then you may need to look at some other options rather than just a straight renewal.

Potatoes

What exactly is a renewal?

A renewal is basically just signing up for more or less the same mortgage for an additional 5 years (or whatever term you select). If you have a good relationship with your existing lender, they will offer you the chance to simply sign the renewal and continue your mortgage with them at a rate comparable to what is available on the market at the time.

Pros:

The process is very easy and fast. You typically will not have to go through the application process or pay any closings costs. Just sign and go.

Cons:

Often times, people will just blindly sign the renewal form without looking at their options. Knowing this, banks will sometimes offer the renewal at a slightly higher rate than you could be able to get on the open market. You cannot take out any additional funds either.

What to do?

If you see that the rate they are offering is not in line with what others are offering, you have a couple options.

  • Call your lender and try to negotiate.
  • Ask your mortgage broker to try and find a better rate elsewhere and do a “switch” mortgage. This is just taking your existing mortgage amount and transferring it to a new lender without any closing costs.

What if you need more money?

If you need to take out some equity for one of the reasons above, then a renewal may not be a good idea. However, this is still the best time to do a refinance as there is no penalty to break the mortgage. If your mortgage is maturing, that is the time to think about this.

So, in conclusion, a renewal can be good for you if you are happy with the rate being offered and do not need any extra money, but even in this scenario it is always a good idea to review all your options. Speak to your broker who arranged the original mortgage for you, they will help you go over all your options and direct you in the best direction.

 

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Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (877) 335-4486.

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Second Mortgages; that word is usually followed by a shiver down the spines of Home Owners across Canada. But have you ever actually done any research on the topic to know why you’re scared of them? Albeit in most cases they are obtained by those with credit issues, however there are several instances where a second mortgage can be a very useful financial tool. In this article, we are going to focus in on one of those scenarios, likely to most common; how to consolidate debt using a second mortgage and rebuilding credit with a second mortgage.

Money Sitting
Life happens. That is the reality. Some things are planned, some not. Sometimes mistakes are made from lack of knowledge and some from lack of experience. Sometimes unexpected events come up leaving us in a vulnerable position and these events can sometimes leave an unpleasant mess to clean up. A common one is unwanted debt and seemingly unmanageable payments. So what do you do when you have racked up a debt load of say, $50,000? This could have come from credit cards, Lines of credit, major damages at home, personal issues, or even those formerly attractive don’t pay for 6 months retail cards. Whatever the path was that got you here, it’s time to get out. Now with debt that high and an average income, you would likely be making the minimum payment and barely making a dent in the balance. Your credit is now too low to get a new first mortgage, what to do? Enter the second mortgage.
Let’s imagine the following scenario:
Home Value – $400,000
First Mortgage – $220,000 / $1,250/month payment
Debts (Credit card, Line of credit, etc.) – $50,000 @ 18% – $1,500/month minimum payment
You have gotten yourself into a little bit of a predicament and built up a good chunk of debt for whatever the reason may be and your credit score is now less than favourable. The amounts have grown to be not so manageable and in order to keep up with your payments, mortgage, taxes, cost of living, and whatever else, you are only able to pay the minimum payment at best. Tough situation to find yourself in.
Using the numbers above, we are going to imagine you have $50,000 in debts built up using 3% as a minimum payment of $1,500/month without even making a dent on the principal balance. Remember, your credit is beat up so a new first mortgage is out of the questions, what to do? Sell the house? Not quite. Enter the second mortgage.
Step 1 – By getting a second mortgage to pay out all these debts ($50,000), you would eliminate the $1,500 payment and incur roughly $500/month for the second mortgage. This would be set up on a 1 year term. Over the course of the year, your credit would climb back up to higher levels and you would be saving $12,000 over the course of the year. How much pressure would that alleviate for you?
Step 2 – A year has now passed and your credit is at levels required for “A” lending and there is enough equity in your home to do so (you can borrow up to 80% of the value of your home). You saved $12,000 in payments over the year which you were able to use to catch up on the rest of your life, maybe take a much needed family vacation or update the washrooms. You are now ready for phase 2 of the debt consolidation plan; refinancing your first mortgage to combine the first and second mortgage into one new first mortgage. So let’s assume your first mortgage balance dropped down to $215,000 over the past year. You add on the $50,000 second mortgage and have a new first mortgage of $265,000 an interest rate of 2.59% and a total payment of $1,057.59/month. In shock? Well believe it people. Let’s compare once more.
secod mortgage chart
* Estimated numbers only. This is only an example and not an offer of any kind. Your numbers could vary from this.

Look at the difference you have made. You went from a seemingly hopeless scenario to back in the game. With the right Rich Guy2advice and proper strategy, a second mortgage can be an invaluable asset in consolidating debt and rebuilding credit. There are also other scenarios in which a second mortgage can be useful, such as making a short term investment or renovations where you want to keep monthly costs low. Understanding something can change your opinion on it and a 2nd mortgage is a good example of this. We’re not saying to go out and slap a second mortgage on your house. Obviously if you have other means of handling the scenarios above, it would not be wise to pay high mortgage rates for no reason. However, under the right circumstances like using a second mortgage to consolidate debt, a Private loan can be a helpful tool to get you back on track!

Have an idea for an article or something you would like to see posted? Post it in the comments below or on Facebook and we will do our best to produce it for you. Or sign up for our email reports to stay up to date with market news and special rate promotions.

Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (877) 335-4486.

Best Home Loans & Financing - The Financial Forum

 

VERICO The Financial Forum Ltd.

“Your Connection To A Better Mortgage”

Together, We Make Mortgages Easy!

Managing debt can be a tricky endeavor and a sometimes stressful task, especially when you add in the newly acquired holiday debt. Putting in place a plan to consolidate these debts, lower interest and improve your overall cash-flow can save you loads of stress, time and money, leaving you with more of the latter two to use on the things and people you love.

Every year we get an influx of clients looking to re-finance after the holidays to consolidate the debts they have built up once they see those credit card statements from Christmas. Why not play it smart and get ahead of the pack this year?

DON’T WAIT FOR RATES TO GO UP!

 If you feel you are getting to the point where a debt consolidation loan may be the right move for you, then do yourself a favour and get the process started now. If you apply now there are 2 major benefits (among the several others):

Finding The Right Credit Card1

  1. Your loan will be ready to close early in the new year so you don’t have to wait another month after you really need it.

  2. You avoid any interest rate increases. If rates go up after the holidays (which is quite likely) but you get your approval now, then you are protected from those increases. If you wait like most people when the demand becomes high, there is a good chance you will be paying a higher rate.

If you have been thinking about re-financing or planning to purchase in the next few months, don’t wait anymore. It could cost you! Call or email us this week to see what you would qualify for:

  • Lower your current rate
  • Pay off Credit card debts
  • Renovate your house and increase the value
  • Get ready for big holiday expenses

Check out these potential savings:

Debt Amount Credit Card Interest/mnth Mortgage Interest/mnth Monthly Savings Annual Savings
$10,000 $150 $22.41 $127.59 $1,531.08
$15,000 $225 $33.63 $191.37 $2,296.44
$25,000 $375 $56.04 $318.96 $3,827.52
*O.A.C. Clients must qualify. Rates are subject to change. Figures above are meant to be estimates for example purposes only, not to be used as a payment structure or proposal of any kind.

Remember, there are always options for you to help improve your situation. If you find that you are in a situation where you are paying high rate credit cards and feel like you are making no progress at all, talk to us to see if you have alternatives and how to get started. Furthermore, if you are stuck in a high interest first mortgage of over 3.00%, you may want to look at the possibility of a re-finance to see if you could be saving money.

Finding The Right Credit Card

We hope everyone has a great end to their holidays and a very Happy New Year!

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Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (877) 335-4486.

Best Home Loans & Financing - The Financial Forum

 

VERICO The Financial Forum Ltd.

“Your Connection To A Better Mortgage”

Together, We Make Mortgages Easy!