Reposition your Debts through Mortgage Financing

If you’re a homeowner looking to optimize your finances,

consider taking advantage of your home’s equity to reposition

any existing debts you may have.


If you’ve accumulated consumer debt, the payments required

to service these debts can make it difficult to manage your

daily finances. A consolidation mortgage might be a great

option for you!


Simply put, debt repositioning or debt consolidation is when

you combine your consumer debt with a mortgage secured to

your home. To make this happen, you’ll borrow against your

home’s equity.


This can mean refinancing an existing mortgage, securing a

home equity line of credit, or taking out a second mortgage.

Each mortgage option has its advantages which are best

outlined in discussion with an independent mortgage

professional.


Some of the types of debts that you can consolidate are:


● Credit Card

● Unsecured Line of Credit

● Car Loan

● Student Loans

● Personal or Payday Loans


Most unsecured debt carries a high interest rate because the

lender doesn't have any collateral to fall back on should you


default on the loan. However, as a mortgage is secured to your

home, the lender has collateral and can provide you with lower

rates and more favourable terms.


Debt consolidation makes sense because it allows you to take

high-interest unsecured debts and reposition them into a

single low payment.


So, when considering the best mortgage for you, getting a low

rate is important, but it’s not everything. Your goal should be to

lower your overall cost of borrowing. A mortgage that allows

for flexibility in prepayments helps with this. It’s not

uncommon to find a mortgage at a great rate that allows you to

increase your payments by 15% per payment, double your

payments, or make a lump sum payment of up to 15% annually.


As additional payments go directly to the principal repayment

of the loan, once you’ve consolidated all your debts into a

single payment, it’s smart to take advantage of your

prepayment privileges by paying more than just your minimum

required mortgage payment, as this will help you become debt-

free sooner.


While there is a lot to unpack here, if you’d like to discuss what

using a mortgage to reposition your debts could look like for

you, here’s a simple plan we can follow:


1. First, we’ll assess your existing debt to income ratio.

2. We’ll establish your home’s equity.

3. We’ll consider all your mortgage options.

4. Lastly, we’ll reposition your debts to help optimize

your finances.


If this sounds like the plan for you, the best place to start is to

connect directly. It would be a pleasure to work with you.

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