Debt consolidation programs work well for the client when applied as follows:
|Example # 1 (before remortgaging)|
|Unsecured Line||Paid off||$0.00|
|Credit Cards/Loans||Paid off||$0.00|
|Penalty/Tax Bill/Other||Paid off||$0.00|
|Total||$182,500||$959 monthly ($891 less)|
Note that the mortgage balance has increased by $32,500 and the client's monthly cashflow has improved by $891. By redirecting the $891 back against the new mortgage/loan balance, the non-mortgage debt component can be paid out in about 3 years. Had the consumer debts averaged 15% interest, the time frame to eliminate the debts would have been 4 years (holding the monthly payment constant). The strategy has saved the client $10692 in interest.
From a mortgage planner's point of view,
If you or your client, friends or associates have any questions on this or any mortgage situation or need, please feel free to contact us.
If you own your own home, have at least 20% equity, and think you can mortgage qualify, please feel free to schedule a review and planning session.
As licensed professional mortgage brokers, we know exactly what it takes to qualify you for a mortgage and we do more than just get you a great mortgage at a great rate, we will show you the way, too.