Why Debt Consolidation May Be Right For You
You may be eligible to combine all of your high interest debt, including personal lines of credit, auto loans and debt from credit cards into one low rate mortgage loan.
By putting all of this consolidated debt together in a secured loan supported by the equity in your property, you may be eligible to access interest rates that are lower than what a personal line of credit would otherwise allow.
This is a helpful process for those individuals who are unable to make their monthly payments on time. One reduced per month is all that is required from debt consolidation.
3 Popular Reasons Canadians Consolidate Debt
Three of the most common reasons that individuals in Canada choose to consolidate their debt include:
- Decreasing your monthly payments
- Improving your credit score
- Lowering your interest rate
Whatever you’re interested in, make sure you have all the facts upfront before deciding to move forward with steps to consolidate debt.
3 Ways to Combine Debt Consolidation with Your Mortgage
There are three ways that you can consolidate your debt into one mortgage. This is known as:
- A home equity line of credit
- A second mortgage
A home equity line of credit is a line of credit supported by your home. It enables you to access up to 80% of the home’s value.
Refinancing allows you to get up to 80% of your home’s value by breaking your mortgage term early.
Finally, a second mortgage frequently comes with a very high interest rate, so you should always do all of your research in advance to determine whether this is right for you.