In the simplest of times, debt has a way of creeping up and quickly causing grief in our everyday lives, not to mention the havoc it can wreak during a pandemic, creating extra stress and uncertainty.
A debt consolidation mortgage is an affordable way to pay off debt and give your finances a fresh start. If you have equity built up in your home, this is your opportunity to refinance your mortgage and take out extra money to consolidate your debt into one loan at a lower interest rate. And with interest rates at all-time lows – and not expected to rise anytime soon – it makes sense to review all your options.
How does debt consolidation work?
You can typically borrow up to 80% of your home’s appraised value through a refinance. If your mortgage is coming up for renewal, now’s the perfect time to consolidate debt at no extra charge for breaking your mortgage early.
Breaking your current mortgage before the term is up may also make sense when you crunch the numbers and compare your immediate savings with the penalty you’ll have to pay to break your current mortgage versus waiting until loser to your renewal date. Acting quickly may also preserve your credit score, which will always benefit you in the long run to ensure you receive the very best available mortgage products and rates.
Your mortgage agent can help you make the best decision based on your specific circumstances. It’s important to understand that prepayment penalties can vary widely from lender to lender, so having help running numbers can be a lifesaver.
Regardless of why you’re looking to consolidate debt into your mortgage, once you’ve accessed your equity for this purpose once, be sure you put a plan in place so you don’t have to keep tapping into your home equity.
Have questions about debt consolidation, or concerning your mortgage in general? Answers are a call or email away!