Are you a Brampton resistant who would like to regain control over their finances in 2020? If you are a homeowner that is struggling with debt, it can feel like there is no way out. After your monthly debt payments are made, it can feel like there is nothing left over for doing the things that you enjoy or for saving for retirement. But by consolidating your high-interest debts, you can lower your payments and get out of debt sooner.
Debt Consolidation for Brampton Homeowners
If you are a homeowner in Brampton, you can use the equity in your home to consolidate your debts. As a mortgage broker, I can offer you a number of solutions and help you choose the strategy that is best suited to your current situation.
Possible tools for debt consolidation include the following:
- Home refinancing – with this method, you would break your current mortgage and replace it with a new one. The new mortgage would be for a higher amount but it would pay off your current debts. When you refinance your home, there is usually a financial penalty for breaking your first mortgage, so this strategy is best suited to those who are close to their mortgage renewal date.
- Second mortgage – with this method, your first mortgage stays intact but you would take out a lower, second mortgage – enough to pay off your existing debts. Second mortgages typically have a higher interest rate than first mortgages however the interest rate is still much lower than other forms of debt. This strategy is better suited to those who have a mortgage renewal date that is farther away.
- Home Equity Line of Credit – this is a revolving line of credit that uses the equity in your home as collateral. This option is often recommended for Brampton homeowners who may need to borrow from their home equity more frequently.
- Reverse Mortgage – To qualify for a reverse mortgage, you must be at least 55 years of age. The advantage of a reverse mortgage is that you don’t have to pay back the loan until you move out of your home or pass away. The drawback, however, is that the interest accumulates and it can significantly reduce how much you have in your estate to pass on to your beneficiaries.
Knowing what method of debt consolidation is best for you can be confusing, but I am here to help. Contact us at my Brampton office to schedule a consultation.