Refinance / Debt Consolidation
Do you have a lot of equity locked up in your home? With home values having climbed significantly over the last few years this could be an inexpensive source of capital to do some home renovations, invest for retirement or to wipe out higher debts such as credit cards or unsecured lines of credit.
Since your home is such a valuable asset lenders will provide the lowest rate of interest against it compared to other forms of lending.
Some quick math: Suppose your home is worth $400K with a $200K mortgage on it while you are carrying $20K on an Unsecured Line of Credit and $5K on your Credit Card.
Mortgage payment on $200K mortgage at rate of 3.2% with 20 year amortization = $1,127.19/month.
Unsecured line of credit on $20K at 5.25% = $600/month
Credit Card payment on $5K at 19% = $150/month
Total monthly carrying cost = $1,877.19
Instead, you could refinance your mortgage to $225K, wiping out the 19% credit card debt and the 5.25% line of credit debt and replacing it with a 5 year fixed mortgage currently at 2.99% (dated August, 2014). Using the same time-line you have set-up to pay off your $200K mortgage you have now shrunk your monthly total debt payment to $1,244.64.
Should Debt Consolidation make sense for you then give me, Michael Pezzack, a call (416-850-2642) and let's discuss your unique situation.