This is an article that was published with the Cambridge Times on October 1, 2017, featuring our very own, Tracy Valko:
Tracy Valko of Dominion Lending Centres in Kitchener, Ontario, reminds homeowners that the solution to non-mortgage debt could be a lot closer to home than they think.
Equifax Canada, which provides consumers credit bureau information, says that non-mortgage debt has risen 3.3 per cent in the second quarter of 2017- which is alarming, because household debt in Canada is already at al all-time high and many people are living paycheque to paycheque to make ends meet.
However, if you’re having trouble making minimum payments on credit cards and other loans, the solution may be your mortgage equity. If you’ve owned your home for some time, or even if you’re a relatively new home-owner and your property has increased in value substantially, you might be able to tap into the equity through mortgage refinancing to tackle other debt.
Under Canadian law, you can borrow up to 80 per cent of the appraised value of your home, minus the remaining balance of your mortgage. For example, the government website says if you have a property appraised at $300,000 and you still owe $175,000 on it, you can actually borrow $65,000.
This is a great way to free up cash for a renovation (which may also increase the value of your home – a win-win), but you can also pay down other higher-interest debts and consolidate them into your mortgage at a considerably lower interest rate.
This could be the solution you’re looking for to save your credit rating from missed credit card and other loan payments, not to mention to avoid pesky collection agency calls. Refinancing can also allow you to switch from a variable rate to a fixed rate, which may be favourable for you at the moment with recent rate changes.
To find out more about what the mortgage team at tracy’s office can do for you, including commercial mortgages and even mortgage life insurance call the office at 519-745-8019.
The Valko Team is located at 1187 Fischer-Hallman Road, Suite 623.