The Good, The Bad and The Ugly of Debt Consolidation Mortgages
Between their credit cards, student loans, and lines of credit, many Canadians are struggling with debt. If you’re reading this article, maybe you can relate. It can be frustrating to see so much of your income go to creditors and have nothing to show for it. One solution that many Canadian homeowners turn to is debt consolidation mortgages.
Debt consolidation mortgages can be an extremely useful tool in helping you to get out from underneath that heavy debt burden. But first you need to understand the good, the bad and the ugly of it all.
The good: why debt consolidation mortgages are a powerful tool.
Rolling your other debts into your mortgage usually means that you’ll be paying less interest and your monthly payments can be lowered by hundreds or even thousands of dollars every month. With this freed up cash flow, you’ll be able to build up your emergency fund, save more money for retirement and maybe even enjoy your life a little more. That extra money in your bank account will feel good and hopefully relieve some of your financial stress and worries.
The bad: possible drawbacks of debt consolidation mortgages.
Unless your mortgage is up for renewal, refinancing is going to cost you. Most lenders charge penalties for breaking a mortgage early plus you may need to pay extra CMHC when the total amount of your mortgage goes up.
While the money you save by consolidating your higher interest loans may be well worth it, you’ll still want to have a professional help you to determine if refinancing truly makes sense for your situation.
The ugly: you need to avoid the danger of running up your credit again.
Suddenly having an extra $500 (or more!) in available monthly cash can seem like a dream come true – but those who are not careful can quickly end up in more trouble than they started with. If you truly want to benefit from a debt consolidation mortgage, then you need to make a commitment not to go back into debt. Otherwise, what will you do? Refinance again? That’s an ugly cycle and it can lead to financial ruin.
If you are ready to get serious about attacking your debt and building up your emergency fund, then a debt consolidation mortgage may be the answer. To determine if this is the right solution for you, call the experts at Matrix Mortgage Global today. You can reach us 24/7 at 1-800-429-0717.