Consolidating Your Debts by Refinancing Your Mortgage
If your debt feels messy and out of control, you may have the option of consolidating your debts through mortgage refinancing. Using money from your refinanced mortgage, you can pay off smaller debts and then simply concentrate on paying off your mortgage at a much smaller monthly payment than the sum required by the combination of your previous debts.
Transcript
Teague Brinkworth: Want to take money out of your home to consolidate, invest or do renovations? Your home can be used as a tool to get ahead in life.
Let’s use the example of a debt consolidation. Jim owns his home, but he is having trouble making his mortgage payments. Work is slow and he hasn’t been getting the overtime he is used to. That overtime was going to help pay off his credit card, his home theatre system and the renovation loan he took out early last year. Jim is finding it hard to make ends meet. Is there something he can do to save his credit and free up some extra money? Absolutely, let’s do the numbers.
Jim’s monthly costs are: his mortgage of $250,000, with a monthly payment of $1,600; his credit card, with a balance of $8,000 and a minimum payment of $240; also, he has the renovation loan at $308; and the home theatre loan at an additional $300. Overall, with monthly payments adding up to $2,448 and a total debt load of $278,800, Jim is feeling the pressure. If Jim refinanced his mortgage to pay out all his other debt, his monthly payment would be $1,784—that’s a monthly savings of $665. On another note, if Jim were to put that $665 back into his mortgage, he would pay the entire balance in 14 years and not the 25 years he has remaining now.
If you would like to find out if you could benefit from consolidating your debts call me, Teague Brinkworth, at 250-374-2222.
debts
February 25, 2010
I came across this blog – interesting read