PROUDLY CANADIAN
Debt considerations
The question of whether you are receiving the best available mortgage rate is one that is often asked by those who wish to reduce their monthly and regular expenditure on servicing debts. The consolidation of debt has become a recognized and preferred method of debt control and gaining a clean debt-free slate. However, there are some basic steps to take in the process of debt consolidation. The goal is always to start and continue adding positively to your balance and not that of the bank!
An important factor related to this procedure is the understanding of your credit line which is a determining factor in the interest rate applied to your mortgage. In the first instance, a copy of your credit rating report must be obtained, from which you can determine the amount of credit you have available. At the same time, review your account to ensure that the stated balances are accurate. The purpose of this exercise is to help you gain a real-time awareness of what you owe and what the banks and lending institutions are shown when assessing your creditworthiness.
Feeding your interest
The interest rates charged on your respective credit cards is a crucial issue, especially if every month you are in effect, feeding that interest with further debt, or not maintaining full payments. The interest rates stated on your credit information will confirm the amount of money you will save by consolidating your accounts. It can be anticipated that your credit cards, store cards and personal direct lines of credit will be subject to interest rates of between 6-percent to 24-percent.
Accordingly, the question must be asked, as to why you pay 20-percent interest rates. By consolidating your credit card debt into one monthly mortgage payment, at a competitive mortgage rate, you can gain relief from debt significantly quicker.
Consolidation
Should you have the advantage of the equity in your home, lending institutions, including banks will offer you the option of borrowing up to 80-percent of your assessed home value. A qualified mortgage broker will help you determine the mortgage rate that will be applicable and also discuss how refinancing to consolidate your debts will benefit you financially.
Various aspects of the process will be advised including whether you would be able to secure a low rate of interest. In addition, whether a lender will accept responsibility for the costs associated with the refinancing transaction, which would, in turn, give you extra savings.