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First off, Happy New Year - I hope your holidays were
great, here's to making 2006 a year to remember!
If you are one of the few Christmas shoppers that paid
cash for everything this year, then this newsletter may
not be of interest to you. If, on the other hand,
you pulled out the plastic (and for some, it was pulled
out a LOT more than others), this month's newsletter may
be of use to you.
In the past, we've talked about when to consolidate your
debt. For some, this option may be the best route
to recover more quickly from accumulated monthly and
Christmas obligations (see September newsletter
archive). Interest rates on that plastic far
exceed the available mortgage rates on the
market today. True, rates have edged
up in the past couple of months, but there's still no
comparison.
A simple refinance could help eliminate those high
credit card payments, and turn them into one low monthly
payment. Obviously, it has to make sense to
"re-do" your mortgage, but it's worth a look in many
cases. Again, it depends on just how much
liability load you carry.
What other
options are there?
I'm going to expose a little known secret to you that
may be an alternative option. For those of you
that own a home but do not wish to break your current
mortgage to eliminate high rates from your credit cards
- there's the Home Trust Visa card. It is a card
designed around using the equity of your home as
security, without having to alter your
current mortgage. Why replace one card with
another one? Here's why: this Visa offers a
minimum monthly payment of only 1.5% of your card
balance!
This is not an "introductory
rate". The interest rate on the card can be as low
as 9.99% and you only pay monthly payments of 1.5% of
the balance. Sometimes it's easier to shift your
payments rather than refinance. Most other credit
cards will have you paying 3% of your balance, so your
monthly payments on a Home Trust Visa card will greatly
decrease. As well as lower monthly payments, the
Home Trust Visa card compounds the interest
semi-annually rather than monthly. This means
considerably less interest will be paid by you in the
long run.
Potential
Pitfalls...
Christmas is over and for
future reference, here are a couple ways to avoid the
woes of being caught in "credit incarceration".
1. We've all heard of the "don't pay for a year"
programs out there. Seems like a deal. Get
stuff now - pay for it later (and we all know "later" is
when we have money - right?) In many cases this
program is quite handy, and can be put to good use.
The potential pitfall with it though is that after the
year is up, you're paying on highly inflated rates.
I personally have seen people pay twice as much for items than what the original ticketed
price was. The intentions were good, but the
interest caught up with them. Be sure to watch the small print
on the these contracts.
2. Cards that offer a super low
introductory rate sometimes have really high interest
rates after the intro rate period is over.
Understandably, it's enticing to have such a low
rate on borrowed money. However, after the introductory rate
has ended, you will be into inflated interest rates that can leave
you financially handcuffed. Again, always read the
small print on these types of contracts.
Perhaps moving your balances from existing credit cards
into the Home Trust Visa is the way to go for you.
If you would like more information on this or any other
product, please do not hesitate to contact us.
Just ask, and we'll go through the numbers with you!
Here's to 2006...
Sincerely,
DAN MASS,
AMP Broker/Agent
Canada First Mortgage
direct:
403.294.0033
cell: 403.710.1505 fax: 1-866-902-4910
email: dan@canadafirstmortgage.com
website:
www.canadafirstmortgage.com
193 McKenzie Towne Gate SE Calgary, Alberta, Canada
T2Z 4G2
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