Why Should I Consider Refinancing?

$ 93 Billion………that is the collective credit card debt that Canadians racked up in the year 2022 and in the first three months of 2023 credit card debt increased another 15%.

Now, let’s say you have a credit card and you are sitting with a balance of $5000 (and by the way DO NOT go over your limit if you can help it as this will damage your credit score). It is likely that your minimum payment is $125 per month. Do you know how long it will take to pay off that debt? The answer is:

273 months….that is correct – over 22 years making the minimum payment to pay off that one credit card with a $ 5000 balance. Ouch.

In addition to the $5000 that is sitting as a balance on that credit card, you will pay an additional $6923.09 in interest by time the card is paid off with those minimum payments. So, that $5000 cost you an additional $6923.09 in interest. The total amount that you paid with interest would be $11 923.09.

Is There A Solution?

Now, if you own a home, you have equity. That equity is yours and can be accessed as a way of managing debt. Typically credit cards have an interest rate of 19.99 % or higher and as we saw from the illustration above, high priced debt such as car loans, unsecured lines of credit, and those nasty credit cards cost you an exorbitant amount of your hard earned money when interest is added.

So what does this have to do with refinancing my home? In Canada, we are able to refinance your home up to 80% of its value. For example, let’s say that your home is worth

$500 000, 80% of that is $400 000. If you have a remaining mortgage balance of $250 000, there is $150 000 available to you so that you are able to pay down outstanding debt. You don’t have to access the whole amount of the equity but you would be able to if needed.

The burden and stress that finances have on relationships is staggering. Recent studies have shown that nearly half of Canadian couples admit that financial tension, primarily with regards to debt, is the number one area of conflict in their relationships. And, sadly enough in many cases this has led to the breakdown of the relationship. Imagine having your debt wiped out. The relief of that weight being lifted off your shoulders will not only provide peace of mind but the ability to escape the dark cloud of debt.

I would welcome the opportunity to discuss with you how we can provide a debt solution that meets your needs and helps you move forward financially. If you own your home and want to see how a solution may be possible be sure to contact me for a no obligation analysis of how we can make your home equity work for you!

~ Jeff Teed, Mortgage Agent

Mortgages KW

jeffteedmortgages@gmail.com

519-788-3775

Verico Best Mortgage Loans #16265