the best mortgage solution for you
Can I use my mortgage to payout debt?
In 2006, CMHC advised that 71% of mortgage holders refinanced their mortgage before renewal – and that almost one-third of them did so to consolidate debt. Welcome to the world of mortgage consolidation.
It’s an obvious solution when you can replace 15-20% debt with 3% mortgage debt.
The rules are much different today than they were. Once you own your home, you can’t refinance above 80% of the house’s value. To do this today, you need a decent amount of equity in your home.
People will look at increasing their mortgage to payout other debts typically for one of two reasons:
- to reduce their monthly payments – dramatically
- to zero out a line of credit and get it on a real repayment plan
For example, a $10,000 credit card has base payments of $300 a month. That same $10,000 in a mortgage today would be $55 assuming a 3% rate and 20-year amortization.
You can do the math if you are carrying $20,000 or $50,000 in credit cards and unsecured lines of credit.
Emotionally, most people sleep much better with one mortgage payment than they do with multiple mortgage, loan, credit card payments as well.
If mortgage consolidation sounds like something that can help you, contact Jim to explore your options. Together, we will build an overall strategy to get you debt and mortgage free.