Is Debt Consolidation the Right Solution for You?

Is Debt Consolidation the Right Solution for You?

Are you paying multiple debts with different interest rates? If so, it can be challenging trying to keep track of all the payments, especially when they come out on different days and have multiple interest rates. Fortunately, there’s a solution that can make it easier –debt consolidation. When you consolidate your debt, you basically roll all your current debts into one. This means you have one interest rate for your debt with one single payment that is easy to manage. If this sounds like something you may be interested in, read on to learn more about debt consolidation and whether or not it’s the right solution for you.

Benefits of Debt Consolidation

Juggling multiple payments can be difficult, and if you miss just one you could impact your credit rating and also end up with a hefty penalty. With debt consolidation, you can combine all your debts into one with one monthly bill, making your debts much easier to manage. Debt consolidation is also an excellent way to roll all of your higher interest debts – credit cards, unsecured lines of credit – into one lower payment. Not only will this lower your monthly payment amount and increase your cash flow, but it will also allow you to pay it off faster and save you interest. 

Other Reasons to Consolidate Your Debt

You may also be eligible to consolidate your debt into your mortgage. To do this, you’ll need to refinance your existing mortgage. Not only will you get lower interest rates and payments, but you can also borrow additional funds from your mortgage if you have enough equity built up in your home.  Sounds like a win-win right? Not always. When you consolidate, your mortgage debt will increase by the amount of the debt you roll into it. Also, if you’re not up for renewal and mid-term in your current mortgage, you’ll need to pay the penalty for breaking your current term. Penalties can vary from lender to lender ranging from 3 months interest to Interest Rate Differential (IRD) calculation, In some cases, this can actually work against you. Conveniently, you can find out whether or not it’s worth consolidating your debt into your mortgage by talking to an advisor.

If you want to figure out whether or not consolidating your debt into your mortgage is the right solution for you, contact us at the Mortgage Advisors today. We will crunch all the numbers for you and look at all the factors that could impact your mortgage to find out whether or not this is the best option for you. We’ll also show you all the other debt consolidation options available that you might want to consider. Call us today to set up your first consultation.

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