Use Your Winnipeg Home to Consolidate Debt
Your Mortgage Can Make Outstanding Debts More Manageable
While most people wouldn’t recommend heaping more debt on top of existing debt, there are times when you owe money to a few different entities. Having several outstanding debts can seem stressful, especially when you have bills piling up in the mail every month, and so most people are looking for a way to make them easier to pay off.
If you currently have a mortgage, then you’re in luck, because you can potentially use it to consolidate your debt. People tend to consolidate their debt for a few different reasons, but the most common one is because it allows them to get a lower interest rate on a high-interest account.
Things like credit card bills tend to have very high interest rates, meaning that the debt can very easily pile up if you fall behind even one month. Instead of leaving a debt like this to spiral out of control and keep piling up, it can instead be consolidated so that the amount doesn’t increase as considerably.
That being said, there are a few extra advantages to debt consolidation that don’t have to do with the interest rate. The fact that you’ll only have one debt to pay off can make more of a difference than you think. Despite owing the same amount of money, it will feel a lot easier to pay off a single bill every month instead of three or four of them.
How to Consolidate Your Debt With Your Mortgage
You may be wondering how debt consolidation works, and there are a few different approaches. The first way to do so is to handle the debt consolidation process on your own. While this may be affordable, you’ll have to know what you’re doing, and you’ll also need a knack for negotiation.
On the other hand, if you want to make sure that you get the best terms available, you can hire an individual like me to handle the task. I’m experienced enough to ensure that your debt consolidation occurs smoothly and that the lender will be willing to hear out your terms in the first place.
Keep in mind that some lenders will be wary when it comes to debt consolidation, which is why most people only do it when the time comes to renew their mortgage. By then, the lender will have enough experience with the client to know whether or not it’s too much of a risk to let them consolidate their debt.
While debt consolidation is possible within the initial mortgage agreement, you’ll rarely ever see it happen unless the client has had prior dealings with the lender, so that the risk can be mitigated. If you’re in a hurry to consolidate your debt and don’t want to wait for it to be renewed, you can also break an existing agreement.
Breaking a mortgage means that you take out a second mortgage to pay off the first one, allowing you to change the terms of it before it’s time to be renewed. Of course, there is a catch when breaking your mortgage, as you’ll have to pay a penalty fee to the lender, though your debt consolidation can sometimes make up for this.
Keep in mind that there is no guarantee that your lender will approve you for debt consolidation, and this is often dependent on your loan-to-value ratio. A lower ratio is better, and it will improve the likelihood of having the lender sign off on your debt consolidation.
If you need help through any step of the debt consolidation process, feel free to contact me, as my services range from providing advice to handling the entire negotiation for you.