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Refinancing Mortgages in Markham Helps Fix Debt

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Debt Consolidation and Refinancing Mortgages Markham

 
Markham homeowners are finding it in their best interests to consider debt consolidation in today's market. A debt consolidation loan is employed by banks, credit unions, or finance companies to help borrowers get loans to pay off outstanding debts by consolidating them under one loan. As mortgage interest rates are lower than ever, homeowners want to reduce the interest on their loans by consolidating their debts into their mortgage payments. Full-debt consolidation has the potential to save homeowners up to 75% off their monthly mortgage payments – sometimes even more! This is why debt consolidation is a great option and works hand in hand when refinancing your mortgage. The best way to consolidate debt is to refinance your mortgage with professionally trained and experienced brokers from the Independent Mortgage Brokers Association (IMBA).
 

When to Consider Debt Consolidation

 
Now is the time to take advantage of the low-interest rates and pay off high-interest debts from large credit card companies. Even if you are not trying to pay off debt refinancing, your mortgage can save you money with reduced monthly payments of interest. Because refinancing is gaining popularity, many lenders in Canada offer services regarding debt consolidation, which is why major lenders build strong relationships with each other so that crossover between services such as mortgages are easier to process.
 

Debunking Common Myths

 
One of the myths surrounding debt consolidation is that they are tied to your first and/or second mortgage. Most people think that debt consolidation is riddled with hidden fees and steer clear. However, second mortgages do have high interest rates and hidden fees, which may be the source of the misconception. When refinancing your mortgage, you can often add payout penalties and extra costs such as  a closing cost to your mortgage, so you don't have to pay them up front. Arranging debt consolidation can take about a week, making it an easy and quick solution to fixing finances.
 

Advantages and Disadvantages

 
There are different ways to consolidate debt. You can consolidate the debt by refinancing your first mortgage, through a second mortgage, or with a home equity line of credit.
 
Pros:
  1. Your monthly payments are consolidated into one.
  2. Currently interest rates are low, which can save you money in the long term.
  3. You can stabilize your debt payments into a set time frame.
  4. Extra fees are usually low.

Cons:

 

  1. You need security, such as collateral or equity.
  2. Interest rates are generally higher than that typical of a home equity line of credit.
  3. Unsecured debt consolidations generally have higher rates.

Overcoming Debt

 


Altogether consolidating your debt can be your answer to paying off outstanding debts through refinancing your home. However, there are some factors, such as your credit score, net worth, financial relationships, etc., that will be taken into account and affect your interest rate. Make sure to consult with a licensed mortgage broker before consolidating your debt when refinancing mortgages in Markham.

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