Today we will discuss what “Debt Consolidation” means when it comes to using the existing home equity to your advantage.
Over the recent years, Debt Consolidation has become a common approach to reducing interest fees, saving money, and paying off debt faster.
If you are in a scenario that is similar to the example below, then debt consolidation may be the right solution for you:
- Family carries combined credit card debt of $16,000 with a 19.99% interest
- Family carries a line of credit debt of $11,000 with an 11.70% interest
- Remaining car loan of $43,000 at 8.99% interest
In Total, the family has outstanding debt of $70,000 for annual interest payments of $8,352.
Considering that the interest fee payment comes from an after-tax income, the weight of such debt eats into the family’s budget considerably.
In addition, the clients wish to finally renovate their kitchen, which will require approximately $35,000 in financing.
If you have enough equity in your home, you most likely qualify to tap into this equity by taking it out at a much lower interest rate.
By working with a professional mortgage broker on our team, you could lower your interest payments from paying an average of 8.99% on your car loan to 19.99% on your credit card to a much lower rate of approximately 3.95% and save thousands of dollars in interest fees.
This solution allows you to consolidate debt from multiple different sources into one and provides significantly easier management of such debt.
By paying off your much higher interest carrying debt on your credit cards, line of credit, and the car loan we add this amount to the existing mortgage balance that will carry a significantly lower interest rate. This solution results in paying less in interest fees and paying off your debt that much faster.
Reach out to our team of experienced professionals at Access My Home Equity today for a free consultation:
Email: info@accessmyhomeequity.ca
Phone: 604-362-4467
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