How to Consolidate Debt with a Debt Consolidation Mortgage

Are you riddles with a lot of high-interest debt? If yes, the monthly costs can be overwhelming and can significantly impact your budget. For a few, the right solution to this financial conundrum is to consolidate your debt into single easy-to-make payments. Debt consolidation pays off all your high-interest debt with one payment, helping you save on interest payments. In today’s mortgage rates, a debt consolidation mortgage is a fantastic alternative to save money. However, this strategy is also very risky. Make sure you weigh the pros and cons before making a well-informed decision. For more information about debt consolidation mortgage in Brampton, get in touch. Having considerable outstanding debts such as loans, credit cards, or any other type of unsecured borrowing can impact your credit score as well as your chances of getting a loan from a traditional lender. One can benefit from the above-mentioned situation from a debt consolidation mortgage.

Some tips for mortgage refinancing

If you have a mortgage, there are several ways you can use the equity in your property to consolidate other debts into one single payment to better manage your finances. However, you must be a homeowner, as you will not be able to consolidate debt into a new mortgage as a first-time homebuyer. Any type of debt that is unsecured like credit cards, loans, store cards, or student loans can be consolidated into your existing mortgage.

Is it a good financial decision to use my mortgage to consolidate debt?

We have concluded that consolidating all your high-interest debt is a sound financial decision. However, one has to ask themselves whether one should do it. You must seek top-class advice from professional experts like Harpreet Puri to make the right decision because you are using your house as collateral. Harpeet Puri Mortgage Agent is the name you can trust when it comes to debt consolidation mortgages in Mississauga. Below mentioned are some of the benefits of a debt consolidation mortgage:
  • You can potentially reduce your monthly outgoings. For instance, if you have taken out a ten-year loan for $15,000 with an APR of 9.9%, the monthly payment would be around $193. However, with a ten-year debt consolidation mortgage with an interest rate of 3%, the monthly payment would be $145
  • Interest rates on secured loans are much lower than on unsecured loans.
  • It makes your monthly payments stress-free, as you will pay to only one lender, rather than paying multiple lenders, with each one having different interest rates.

Advantages of a debt consolidation mortgage:

Lesser monthly payments consolidating all your unsecured debts into one loan, you will have lesser monthly payments to make each month.

1. Fixed end date:

If you are only paying the minimum due, you will end up making payments for years to come. Most mortgages have a defined end date and payment schedule, and when you will be required to pay the loan off completely.

2. Lower interest rates:

Based on the state of your credit and the financial market, the interest rate of your mortgage will usually be lower than an unsecured loan, and much lower than a credit card.

3. Qualify for a mortgage interest deduction:

By consolidating all your unsecured debt into one mortgage you save money when filing your taxes. This is because you may qualify for a mortgage interest deduction, which gives you the option to claim the amount of interest paid on your mortgage. Please do not hesitate to speak to our team today for further enquiries on debt consolidation mortgages.  
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