Carol Kollar AMP
Broker # M08003625 - Mortgage Broker
(905)-789-8198 ext. 202
Jan 2010...Do you need a personal paydown plan for your holiday bills?
For many of us, the warmth of holiday gift-giving has suddenly been replaced by a mailbox stuffed with fat VISA and Mastercard statements, reminding you what a fabulous time you had over the holidays. It can be enough to make you want to crawl under a fleece blanket and wait for spring.
We have a better plan. Most Canadians suffer with their highest debt load in the winter – as their holiday bills come home to roost. That’s why it’s the perfect time to talk about a personalized Paydown Plan. It doesn’t cost you anything; in fact, it could save you thousands of dollars in interest. We can help you consolidate and restructure your debt so that every payment you make actually goes further.
This may be the year to do it; we’re still benefiting from one of the best mortgage environments in memory. Take a look at the interest rates on mortgages these days. Now look at what you’re paying on your credit cards and other debts. You can actually power up your debt paydown by rolling your credit cards, car loans, or any other high-interest debt into a new or existing mortgage.
Consider a situation where your current mortgage is $155,000 at 5.5% and you have a monthly payment of $946. In addition to your mortgage you have a car loan of $20,000 and credit cards maxed out at $20,000. You are paying $920 a month on the car loan and credit cards for a total monthly payment of $1,866. Your mortgage planner presents a scenario in which you get a new mortgage for $202,000 to cover the original $155,000, the $40,000 in credit cards and car loan, and $7,000 to break your mortgage. Your new mortgage is at 4.10% and you now have a much lower overall monthly payment of $1,074.
With this new scenario, monthly payments are $792 less each month; a great improvement in cash flow! And if you put $450 of that cash flow into your monthly mortgage payment, you reduce your amortization from 25 years to 15. We’re a fortunate generation of homeowners. We can benefit from low mortgage rates to enjoy our lives and our homes – and to manage our debt wisely.
Home equity debt consolidation is a golden opportunity, especially if the holiday season further added to your debt burden. Aside from the debt stress relief and interest savings, restructuring your debt will also give you a fresh start at responsible financial housekeeping. If this debt consolidation exercise gives you new financial comfort, you’ll want to maintain that ease by living within your means.
Homeowners are recognizing that they need to get smart about debt. Canadians pay a shocking amount of money on their high-interest debt, whether it’s credit cards, unsecured loans, or tax bills. It all adds up. But if you have equity in your home, there’s no good reason to be carrying high-interest debt.
Independent mortgage planners – who have access to more than 50 different lenders, including most of the major banks – have become specialists in helping Canadians restructure debt. In addition to offering access to a broad range of mortgage options, these experienced planners provide credit advice and debt management tips that can help save thousands of dollars. t’s a great place to start.
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