Debt Consolidation Red Deer Mortgage Options
Running out of money at the end of the month is perhaps the worst financial stress, because when your bills seem unbearable, this scenario repeats every month. After all, you still have to pay the car loan, the mortgage payment, the utilities, your groceries. And any unexpected bill can make matters worse.
There are two ways to handle this scenario. The first is to earn more money. The second is to spend less. Earning more money sounds easy. Finding a new job that pays more is difficult. You may not be able to get overtime at work, and life circumstances may prevent you from getting a second job.
Spending less sounds daunting. Is it worth doing more yourself or doing without to save money? Making more meals at home, trying to do home repairs yourself or micromanaging your energy usage is a lot of effort with a low rate of return. However, a fifteen minute call to your Red Deer mortgage broker Jodi and her team at Whalen Mortgages Red Deer could save you hundreds of dollars a month or more, depending on your situation.
Most debts are unsecured. The interest rate on department store cards and credit cards can go as high as 29% because the lender has no way to guarantee you’ll pay it back. The interest rate is tied to the lender’s perceived risk. Red Deer Mortgage rates are incredibly low because they’re secured by your home, a valuable asset we’ll do almost anything to protect.
If you work with a Red Deer mortgage broker to consolidate your debt into a loan secured by your home, you’ll save money simply by reducing the interest rate you pay. The debt payments will also be lower because of the longer amortization period use our calculator. When a $30,000 loan is paid down over 25 years instead of the 3 to 5 years credit cards expect you to repay it in, you’ll pay far less per month while keeping your creditors happy. A side benefit of refinancing your mortgage to include your consolidated debt is that you get a single monthly payment. If this allows you to get control of your bills instead of missing one or two per month, that alone will increase your credit score.
There are a variety of ways Red Deer home owners can consolidate their debt. One method is to refinance their mortgage and cash out home equity used to pay off the various loans. The second option is to take out a second mortgage to pay off your debt. Another option is to open a home equity line of credit; this line of credit has a lower interest rate than credit cards but is rather open. You could withdraw $5000 from the HELOC to pay off your credit cards and write any other checks as necessary, all of it backed by your home’s value.
One of the benefits of a HELOC is that you could pay more without penalty, and you could even pay it off entirely.
Using your home equity to consolidate your debt could allow you to eliminate late payments, debt collectors, structured settlements or bankruptcy. You’ll gain peace of mind as your monthly payments fall to a level you can afford. Then you’ll have money at the end of the month. It is your choice whether that money is used to save for the future, pay down debt or afford those things you’ve been putting off.
Call your local Red Deer mortgage broker Jodi and her team of experienced mortgage experts to get the best interest rates for your debt consolidation loan.