Despite mortgage rates hitting historic lows over the past year, credit cards interest rates and other forms of debt and overdrafts have not declined. In fact, some department stores and banks can charge as much as 29.9% per year! If you only make minimum payments on credit card or other high interest debt, you can end up paying interest every month with very little of your payment going towards the actual principal. A home equity loan mortgage could be the solution to your cash flow and financial problemsIf you own a home in Canada, it has probably increased in market value over time, including the first half of this year. Equity in your home is the difference between the appraised value of your home and the debt (mortgage) you have outstanding. Therefore, if you have been paying down your mortgage and your home has gone up in value, you will have equity in your home.A home equity loan mortgage or line of credit means that you can borrow against that equity at a low interest rate. The debt is a secured form of debt, like a mortgage, that is tied to the value of your home. By using the low interest debt to pay high interest debt, like credit cards, you could save thousands of dollars in interest. By paying down cards and other expensive loans, you can also free up cash flow every month – so you don’t go into debt further. The key, of course, is to avoid running up the cards and debt again.Another option is to refinance your home at a lower interest rate. If your home has increased in value, you can secure a new, higher amount for your mortgage. The advantage here is you will get a low interest rate for your mortgage and you can use the additional money you financed to pay off high interest debt. If you have cash flow issues every month, you will be able to lower your total payments – with more cash going towards the mortgage payment but less going to credit card or other debt (since these will be paid). The total amount you can save in interest over a year can equal hundreds or even thousands, depending on the high interest debt you carry.To find out how your home can work for you if you are in Ontario, Canada, get expert advice from the team at Mortgage Medics. They work for you – not the banks – so they can analyze your situation and give you sound advice that could save you thousands. They give Canadians immediate phone assistance and a free evaluation on a home equity loan mortgage.
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