How to Consolidate Debt with a Debt Consolidation Mortgage
Are you riddled with a lot of high-interest debt? If yes, the monthly costs can be overwhelming and significantly impact your budget. For a few, the right solution to this financial problem is to consolidate your debt into single easy-to-make payments. Debt consolidation pays off all your high-interest debt with one income, 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 precarious. Make sure you weigh the pros and cons before making a well-informed decision. For more information about debt consolidation mortgages in Brampton, get in touch.
Having considerable outstanding debts such as loans, credit cards, or any other unsecured borrowing can impact your credit score and 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 manage your finances better. Any unsecured debt like credit cards, loans, store cards, or student loans can be consolidated into your existing mortgage. However, you must be a homeowner, as you cannot consolidate debt into a new mortgage as a first-time homebuyer.
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. Harpreet Puri Mortgage Agent is the name you can trust regarding debt consolidation mortgages in Mississauga. Below mentioned are some of the benefits of a debt consolidation mortgage:
You can 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 multiple lenders, each with different interest rates.
Advantages of a debt consolidation mortgage:
With fewer monthly payments consolidating all your unsecured debts into one loan, you will have more periodic monthly payments to make each month.
1. Fixed end date:
If you are only paying the minimum due, you will make payments for years to come. Most mortgages have a defined end date and payment schedule and when you will ultimately be required to pay the loan off.
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 allows you to claim the interest paid on your mortgage.Please do not hesitate to speak to our team today for further enquiries on debt consolidation mortgages.
