The Newsy Neighbour Magazine
February Issue 112
Article Provided By: Jason Eldridge of Axiom Mortgage Solutions
With the holiday season behind us and the new year under
way, and while historically this is the time we review our investment portfolio
and get ready for tax time, it may also be a good opportunity to review your
existing mortgage and see if any changes or restructuring are in order.
While lowering your existing mortgage rate and payment,
maybe some renovations, the purchase of a new vehicle or any number of other
reasons or purposes would suggest this may be the right time to refinance your
existing mortgage, perhaps the biggest reason to consider the restructuring
process is to consolidate outstanding debt.
According to a recent survey conducted by CIBC, 28% of
Canadians consider paying down debt to be their top financial priority in 2017.
Their biggest concerns are credit cards and lines of credit. On average,
Canadians owe $1.67 in credit market debt for every dollar of disposable
income. (Source: Business News Network)
For many Canadian homeowners, it can be overwhelming trying
to pay down or pay off multiple credit lines and loan type products while balancing
the other monthly household expenses. If sufficient equity exists in your home,
you could benefit in a number of different ways.
First, you could save on interest charges and lower your
monthly payment obligations by consolidating this debt with your existing
mortgage. You could be saving thousands of dollars in unnecessary interest by
securing a lower interest rate on your mortgage versus the high interest that
most credit accounts carry.
Secondly, this would allow you to or ensure that you
maintain a good credit rating. Not only is paying one bill instead of multiple
bills each month easier to manage, with the other credit accounts being paid
off, your credit score will continue to rise, and therefore, no risk of any
accounts going into default.
Finally, become debt free faster. Since your new mortgage
payment is likely smaller than the combined total of your previous monthly
obligations, this will allow you the option of either saving and/or paying off
your mortgage faster. It’s important to note the prepayment privileges that you
have with your mortgage company as they are not all the same. You would be
surprised what a difference it can make just putting a little extra each month
towards your mortgage can make. These extra payments go straight towards the
principal and not a penny goes to interest.
If you are looking for a change, and/or would like to
experience the convenience and value of working with a dedicated mortgage
professional, please ensure that they have their proper accreditation. As a
mortgage specialist working with Axiom Mortgage Solutions, I am governed by the
Alberta Mortgage Brokers Association (AMBA), the Real Estate Council of Alberta
(RECA) and Mortgage Professionals Canada (MPC). As always, I welcome any
questions or comments you may have regarding the information contained in my
articles. Until next month…
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