Consolidating mortgage and line of credit
Homeowners have the option of secured debt consolidation, which allows them to use their property to obtain a bigger loan.
In general, borrowers can get more money at a lower rate through a secured loan because they are pledging some asset (such as their home) as collateral for the loan.
So if the bank thinks that your home is worth 0,000 and your mortgage is for 0,000, then you own ,000 of your house. Increasing your mortgage is something that the bank may let you do, by taking out a second mortgage to use up some of this equity to pay off your debts.
(Check out our handy mortgage and debt consolidation calculator).
Many national banks offer HELOCs to homeowners who wish to simplify the problem of many unrelated monthly payments into one simple bill.
Consolidating the bulk of your high interest debt into one lower interest loan based on your home's credit can certainly lessen the pressure of monthly bills, but it can also serve the purpose of bringing you income tax credit as well.
If you’re a homeowner, debt consolidation is even easier because it allows you to combine all your debt into one low-rate mortgage loan.
Canada’s housing wealth increased by roughly 0 billion in 2016, giving homeowners enough flexibility to use their property to achieve financial health. Debt consolidation is helpful to anyone struggling to make their full monthly payments on time.
A consolidation loan can reduce your monthly debt payments in two ways.
However, trying to get a home equity loan with bad credit is an obstacle.
Home equity loans and home equity line-of-credit loans or HELOC provide you with cash using the equity you have built up in your home.
Second, you may be able to set up a consolidation loan that lets you pay off your debt over a longer time than your current creditors will allow, so you can make smaller payments each month.
That's particularly helpful if you can combine it with a lower interest rate as well. Basically, you borrow a single, lump sum of cash that's used to pay off all your other debts.