One of the most powerful forms of debt consolidation available today is through mortgage financing.
Not only can you quickly go from credit card interest rates of 18%+ to a mortgage interest rate in the low teens, but you also save your cash flow and credit rating in the process.
CMHC (Canada Mortgage and Housing) allows the proceeds from insured mortgages to be used to consolidate existing debt from instruments like credit cards, lines of credit, and term loans.
And if you can’t qualify for a bank or institutional debt consolidation mortgage product, there still are private mortgages to consider for both first and second mortgage positions. Yes, private money costs more than a bank mortgage, but compared to credit card interest rates, private mortgage financing can still be a significant improvement over what you’re currently paying out each month.
The key to getting the best results from debt consolidation loans is to provide a mortgage broker with your complete financial situation (all debts and all assets).
Too often when people have an excessive short term debt load, they try to pay it down with their existing income and end up…
This is what can be called the consumer credit death spiral.
And while a debt consolidation loan via mortgage may have been the best solution from day one, many times its considered to be more of a last resort type of solution.
I’m not completely sure myself.
Perhaps property owners don’t want to add long term debt to their mortgage, or maybe they don’t realize that debt consolidation is a real option, or it may even come down to a certain level of denial whereby they believe they will be able to get the debt under control someday soon.
But the cold hard reality is that the sooner you can identify the problem and take action, the more low cost options you’re going to have and the sooner you’re going to get the benefits that consolidation provide i.e. saving both your cash flow and your credit at the same time.
Waiting is likely going to erode your credit and could also increase the overall debt load, making it more difficult to come up with good consolidation options.
Debt consolidation through mortgage can allow you to basically start over and get back on track with your finances. And outside of the immediate benefits consolidation provides, it will also preserve your credit rating so that you can utilize it to your best advantage in the future.
Not too many people know this, but having a good credit profile will not only save you thousands of dollars in cheaper credit over your life time, but it can also help you get a job.
That’s right. More employers are doing credit checks on applicants applying for employment. Why? One reason could be that credit profiles can be viewed as a measure of character, how seriously you take your responsibilities, and how well you manage your own affairs.
Bottom line. If you’re short term debt can’t get paid down or off in 6 to 12 months, or its already 6 to 12 months without improvement, then a debt consolidation mortgage is something you should be looking into right now.
Even if things have completely gotten out of hand, you should still find out what you’re options are right away.
The best way to do this is to give me a call and I will quickly provide you with a free assessment and together we can look at different options and decide what the best course of action is.