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Debt can arise from many situations, whether it's unexpected life events leading to increased credit card use, falling behind on property or CRA taxes, or missing mortgage payments.
Mortgage Refinances are designed to help you regain control of your finances with affordable monthly payments, tailored to your situation, so you can get back on track.
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How Mortgage Refinancing can consolidate debts
Mortgage refinancing to pay off debts like credit cards, property taxes, CRA obligations, or overdue mortgage payments offers several key benefits. Refinancing can simplify your finances by consolidating high-interest debts into one manageable monthly payment, often at a lower interest rate. This approach can help reduce your overall financial burden, providing terms that align with your budget and helping to prevent further financial strain while protecting your assets, such as your home. With refinancing, you can find relief from immediate financial pressures and gain the breathing room needed to rebuild financial stability.
Example:
A borrower has the following debts:
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3 credit cards totaling $25,000, with interest rates between 19% and 23%
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$10,000 in overdue property taxes at 12%
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A first mortgage of $200,000 at 6%, with a monthly payment of $1,300
Their total monthly payments are:
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Credit cards and taxes: $1,450
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First mortgage: $1,300
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Total monthly payments: $2,750
Solution:
By refinancing and consolidating their debts into a new mortgage of $235,000 at 4.5%, their new monthly payment would be approximately $1,190. This gives them monthly savings of $1,560, while simplifying their finances into a single, more affordable payment.
This approach not only reduces stress but also saves money, making it easier to manage overall debt