Debt Consolidation
Consolidating debt can be a valuable mortgage solution for paying down debts quicker.
With debt consolidation, debts are often consolidated (merged together) into one, lower interest rate; consolidating debt can be especially useful for borrowers who find it challenging to stay on top of bills.
Mortgage Debt Consolidation Overview
When life gives you lemons, consider consolidating them.
Life is known for its sudden changes, sometimes for the better, sometimes for the worst.
When life drags you down and you find yourself battling what feels like unmanageable debt, there are solutions which exist to help get you back on your feet (debt consolidation).
People often find themselves in financial situations they didn’t expect, and it’s nothing to be ashamed of.
It happens.
With proper professional assistance from a licensed mortgage broker (such as myself!), you can begin to once again see the light at the end of the tunnel.
Consolidating Debt Efficiently
To consolidate means to ‘gather together into one’.
When you consolidate debt, you gather debts from separate loans, lines of credit etc. and combine them into one with a lower interest rate.
How does this help?
For borrowers who have numerous outlets of debt, it can be tough to keep track of them all (increasing the likelihood of missed or higher interest payments)
When debts are consolidated, they are generally consolidated onto a lower interest rate from credit lines with higher interest rates (such as credit cards). This helps borrowers pay debt off more efficiently, and reduce the overall cost of borrowing.
Something to cheers about!
Why Paying Down Debt Matters
When lenders are assessing a potential borrower’s file, one of their key goals is to determine the borrower’s risk-level for lending (ability to pay back their debts).
To do this, they often look through a borrower’s credit score and credit report etc.
If you have debt which isn’t properly managed, your credit score is likely taking the hit (lower than optimal).
To be an attractive borrower to lenders, you’ll want your credit score to sit in a VERY GOOD or EXCELLENT range, show that your payments were made on time, and have a low total debt ratio (TDR).
When borrowers choose to consolidate debts, they do so with the intent to pay down their debt quicker.
Paying off debt quicker often means less money is contributed towards interest overtime, freeing up more funds which can be put towards paying down even more debt (or open you up to new financial opportunities).
It’s a win-win!
Staying In Control Of Your Spending
Debt consolidation isn’t a free pass to spending more money.
Just because you’re enjoying the freedom of having access to more money each month thanks to a lower interest rate does NOT mean you should be spending frivolously. Debt consolidation should be respected as a solution to get you out of debt, not to keep you in it.
If you’d appreciate help with your finances, speaking to a trusted financial advisor may also be a great avenue; they’ll be happy to help paint a personalized, positive financial journey and help you budget accordingly.
Various Avenues Of Debt Consolidation
There are many debt consolidation solutions available - what works for one borrower may not work for the next!
Some solutions for debt consolidation are:
- Consolidating debt through a Home Equity Line of Credit (HELOC)
- Consolidating debt through a ‘debt consolidation loan’
- Consolidating debt using a debt management program
- Consolidating debt onto a line of credit/credit card
- Consolidating debt (privately) with funds from a friend or family member
- Consolidating debt through a ‘debt consolidation loan’
I'll begin by learning about your unique borrowing situation along with your lifestyle and goals to determine if a debt consolidation mortgage solution will be an optimal fit.
What’s A Home Equity Line of Credit (HELOC)?
A Home Equity Line of Credit (HELOC) is a common mortgage solution often used to provide homeowners with opportunities for investments, or to help them with debt consolidation.
The interest rate on a Home Equity Line of Credit (HELOC) is often quite a bit lower than that of a personal credit card or loan, making it an attractive revolving line of credit for debt management.
Why are interest rates generally lower on a Home Equity Line of Credit (HELOC)? Simply because it uses your homes equity as security to lower the risk of lending!
More information about debt consolidation can be found on our page ‘Home Equity Line of Credit (HELOC)’.
Judgement-Free Debt Consolidation Mortgage Solutions
If you’re looking to work alongside someone who can help you manage your debt more efficiently with a down-to-earth approach, I’d be happy to help.
I’m Kyle Benzies (licensed mortgage broker); my mortgage/debt consolidation services are always confidential and secure; I thoroughly enjoy seeing my clients in better financial positions, regardless of whether that means helping renew their mortgage or helping with debt consolidation.
I understand that as humans, we find ourselves in situations we hadn’t hoped for (especially when it comes to finances). Luckily, there are often solutions to help us get back on our feet.
To discuss debt consolidation mortgage solutions or other available mortgage services, give me a no-risk phone call!
***other conditions may apply to anything listed above. The information provided on this page should NOT be implicitly relied upon, and may not be 100% up to date. It's best to contact us for the most current conditions/program offerings for first time buyers***