The holiday season is over and now is the time to start thinking about all that spending you made during the last month or two. Well, if you own real estate, then there is a better option of doing a debt consolidation.
Many people will be stacking up high interest rate credit cards or using their personal line of credit’s to pay off their high interest rate credit cards, but even the unsecured personal line of credits that the banks offer have high interest rates.
If you own your own home and have been paying down the mortgage there is a good chance that you have built up value or equity in your property.
Equity is the amount of money worth on your home, when you take the appraised market value and subtract it from your current outstanding mortgage balance. Financial institutions in Canada, such as chartered banks and trust companies offer secured lines of credit or otherwise known as Home Equity Line of Credit HELOC up to 80 percent of the appraised value. In the financial services industry it is called Loan to Value LTV.
With today’s current Canadian prime lending rate of 3% HELOC’s are rated at Prime plus a percentage point. On average the Home Equity Line of Credit interest rates as of the date of this blog post are Prime + .50%. Is not this interest rate better than the 18 and above percent that you would pay with your credit cards?
A Mortgage Brokerage company such as Trusterra Mortgage would be in the best position to offer you professional and unbiased advise in the context of real estate and mortgages on how to manage your holiday debts and to help you start saving money and interest.
What are you waiting for? Contact us and let us help you to consolidate your accumulated debt and save on high interest rates.