Debt Consolidation Mortgage Kitchener, Waterloo, ON
The constructive use of borrowed funds can help you improve your financial situation. However, not all sources of borrowed funds come with the same interest rate cost.
In today’s historically low interest rate environment, the equity in a person’s house can represent a low cost source of funds that can be used to pay down high cost debt. For example, credit card debt carries a very high interest rate in comparison to today’s mortgage rates. A mortgage refinance might be a very good way to access low cost funds that can be used to reduce high cost debt.
There are several cautions that should be noted. The first relates to timing - if a mortgage is refinanced before the end of its term, then a significant pre-payment penalty might be incurred. The second caution pertains to personal habits. If your spending habits are the cause of your debt concerns, then you need to determine the necessary steps that will help you avoid repeating the problem.