Spring-cleaning your debt could save you thousands!
Wouldn’t spring-cleaning be so much more gratifying
if – somewhere under dusty barbecue parts and
outgrown hockey skates – you found an envelope
with, say, $5000 in cash? Wouldn’t that make
spring-cleaning worthwhile? Of course it would!
Well, you may not uncover a financial windfall
when you’re cleaning the garage this spring,
but a little time and attention to the task of springcleaning
your financial house can be very rewarding.
This spring, dust away the cobwebs and take a
hard look at your debt servicing costs.
Are you continuously carrying a large monthly
balance on your credit card? Or are you making regular
use of your overdraft protection at the bank?
Worst of all, could it be that you’re carrying a
balance on a high-interest department store card?
Take some comfort in knowing that you’re not
alone. However, this particular kind of financial
clutter – ongoing, unsecured consumer debt – is
both confusing and costly. Guess what? It’s time to
spring-clean your debt!
Begin by making a quick list of any loans, credit
cards or other unsecured debts. In addition, make
a note of the interest rates charged on any outstanding
balances. Finally, do a quick calculation of what
you have paid in debt servicing costs this winter.Has the tax man sent you a bill? Don’t forget to
include that debt in your spring-cleaning project.
Next, take a look at the going mortgage rates, and
make an appointment with a mortgage professional.
By rolling your other debt into a mortgage – either
new or existing – you can reduce the number of
payments you’re making each month, you can save
big on interest charges, and you can improve your
cash flow.
How much difference will it really make? Well it
can be as good – or better – than finding the $5000
envelope of cash in your garage. Why? As an example,
if you have a $160,000 mortgage at 6%, high
interest credit cards and other loans of say $33,000;
your total monthly payment could be $2,014.
Now if you took that $193,000 and added on
an approximate $3,000 penalty to refinance your
mortgage, you may be able to potentially roll that
$196,000 into a 4.95% mortgage (OAC, rates
subject to change) that could reduce your overall
monthly payment to $1,134. That’s a monthly
savings of $880. Your monthly payment has been
reduced, you’re saving on interest charges, and all of
your high interest credit card debts are gone.
Imagine if you funneled some of that cash flow back
into your mortgage!
If you have equity in your home -- preferably more
than 25% equity – you may want to consider taking
advantage of attractive mortgage rates and rid
yourself of your financial clutter. Regardless of
where you are in the life of your mortgage, talk to a
mortgage professional who can analyze your situation
and outline your spring-cleaning options.
So as you polish the windows, shake out the carpets
and clear out the garage, don’t forget the most
rewarding task of all: spring-cleaning your debt.
Your financial house will enjoy the fresh beginning,
too!
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> Next step <
1. Keep consulting the Mortgage Library
2. Ask questions to a representant of Mortgage Intelligence
3. Share your mortgage project with us.
