Many Canadians are carrying consumer debt from several sources – credit cards, car loans, personal loans – and are paying much more in interest costs than they should be. An option that many are turning to is paying off higher interest debts with funds secured through a refinanced mortgage that has a lower interest rate.
Debt restructuring can offer a simple way to better manage your borrowing costs. Some who restructure opt for lower monthly payments which create a larger monthly cash flow. Others who restructure opt to shorten the amortization of their mortgage. Paying off your mortgage in a shorter amount of time can easily save you several thousand dollars.
Most importantly, a well thought-out debt restructuring plan can set you up for success, because at the end of the amortization period, your total debt is zero. With revolving credit – such as credit cards – you may be paying a lot in interest without ever attacking the principal.
A mortgage broker can take the time to review your financial needs and advise on how to use the equity in your home to reduce the interest paid on debt drastically. By restructuring your borrowings you gain more control over interest costs, leaving you with more money at the end of the month.