Owing money can quickly become a vicious cycle when most of your earnings go toward paying creditors instead of lining your own pockets.
James Harrison, AMP
Many Canadians have accumulated debt to finance major milestones or to pay for smaller day-to-day items. Though debt is quite common, you should keep a close eye on your loans and think about cutting down. According to the Bank of Canada, most Canadians now owe $1.70 for every dollar they earn. As interest rates climb, homeowners are focusing on paying off debt and saving money in 2019.
The higher your debt load, the less cash flow you have. Before your bills become too much to handle, talk to a mortgage broker about debt consolidation options and your eligibility to refinance. Mortgage brokers have the knowledge and resources to advise you on the most effective ways to pay down debt and increase your cash flow.
Pay High-Interest Loans First
Loans like credit cards, lines of credit, high mortgage rate loans, and private company loans are harder to pay off because a bigger portion of your payment goes toward interest. You can save money by paying off these bills first. For larger amounts that take longer to pay, consolidating debts into a lower interest secure line of credit or mortgage line of credit will help you save money so that you can repay the debt quickly.
Refinance Your Mortgage
You can lower your monthly mortgage payment and increase your cash flow when you refinance your home loan. Rather than continue to pay unrealistically high interest rates, you can consult a mortgage broker to find a lender that offers lower rates so that you can put more money toward the actual loan. A broker can also advise you on the best options to reduce your monthly mortgage payment so you can save more money for other things, like childcare.
Consolidate Your Loans
If you have too much credit card debt or high-interest debt, consolidating them into one low-interest loan will reduce your monthly expenses to one manageable bill.
Save for an Emergency Fund
Saving money can be challenging when you owe creditors, but having money for unexpected emergencies will reduce your risk of going further in debt. Increase your cash flow by putting part of your earnings away each month so that you’re better prepared in an emergency.
In today’s borrowing culture, Canadian homeowners have high debt. Multiple loans and high interest rates can negatively impact your credit rating if you cannot pay your bills. Before your debt load becomes overwhelming, talk to a mortgage broker. A broker can help you find effective ways to save money by refinancing your mortgage or consolidating debt to a lower interest rate line of credit, and you can avoid lowering your credit score.
With the help of a Mortgages.ca broker, you have nothing to lose and only great INSIGHTS to gain.