Debt Consolidation
If you have enough equity in your home, you will be able to pay out high interest debt through a refinance. For example, if you have a number of outstanding debts, such as a car loan, an un-secured line of credit, or a high amount outstanding on a credit card, you may be able to consolidate all of them through mortgage refinance. Consolidating these debts into a mortgage, not only reduces the interest rates you are paying but can also reduce monthly payments and increase your cash flow.
A review of your current financial situation will determine if debt consolidation will work for you. There are a number of considerations to be taken into account – current interest rates, legal fees, mortgage insurance, term left on existing mortgage and penalties.
Here is an example of what a debt consolidation can do to you:
| Current Debt | Outstanding Amount | Interest Rate | Monthly Payment |
| Mortgage | $500,000 | 3.75% | $2,563 |
| Credit card | $15,000 | 19.99% | $450 |
| Line of Credit | $20,000 | 7.5% | $600 |
| Car Loan | $12,000 | 4.99% | $320 |
| Total | $547,000 | $3,933 |
| Current Debt | Outstanding Amount | Interest Rate | Monthly Payment |
| Mortgage | $547,000 | 2.59% | $2475 |
| Credit card | 0 | ||
| Line of Credit | 0 | ||
| Car Loan | 0 | ||
| Total | $547,000 | $2475 |
In this case, you are able to reduce the monthly payments to $2,475 and increase cash flow by $1,458.
Feel free to Contact Us for a free analysis and consultation.
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Head Office: 5770 Hurontario St., Mississauga, ON, L5R 3G5