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Dear friend,
Have you lived in your home for at least a year? Do you
carry any monthly debt outside of your mortgage payment?
Read on to find out if consolidating debt may help to
save you money?
We know from past newsletters that equity is the
difference between the value of your home, and the
balance that you have left owing on your home. Therefore,
there is potential power in equity.
I would like to bring to your attention the amount of
interest you're paying on your credit cards, your loans,
and any monthly payment obligations that you pay
interest on. What is the average interest rate
that you're paying between all of the payments?
Have you checked lately? I know you're busy - I
understand, but as life goes by and you keep paying high
interest rates on your borrowed money, you may be giving
the credit companies your vacation money! A small
difference in interest rates can mean thousands of
dollars in the long run.
So where am I going with this? Everyone knows that
most borrowed money is not "free" - this is true.
But what if you could streamline your interest rates
into one lower, more advantageous rate? I'm
guessing you would probably like that idea. It's
called consolidating your monthly payments. By
definition, the word consolidation means "the process of
uniting". In the arena of loans, you are taking
your existing loans and uniting them into one payment.
Let's reintroduce the fact that mortgage interest rates
are still at historical lows, generally beating out
"unsecured loan" interest rates. You probably
already have a decent mortgage interest rate, and now
you have accumulated monthly revolving and installment
debt that, for the most part, is unwelcome and
uncomfortable. By consolidating your payments, you
can effectively eliminate payments with high interest
rates. How much money would it save you on a
monthly basis? Yearly? It can add up in a
short period of time.
So when is it the right time to consolidate your debt?
Let's look at the current prime rate in Canada. It
is currently 4.50%. Most unsecured loans are being
priced at, in and around, prime plus 2% to prime plus 4%
(that's 6.50% - 8.50%). Our current discounted 5
year fixed interest rate is 4.50%. There's 2.00%
savings right there if you consolidated and moved into a
new fixed mortgage rate. What about the variable
interest rates? The most popular variable rate out
on the market today is prime MINUS .80% (that's 3.70%
currently). Do you see where the numbers are
pointing to?
Now what about those credit cards with high balances and
interest rates around 11% - 20%? How about that
loan you have, or the combination of credit cards and a
loan? Maybe there are student loans that you would
like to FINALLY get rid of? Calculating the
numbers may seem like a daunting task, but as mortgage
brokers, we are here for more than just "shopping"
around. We focus on your unique situation, and
strategize for your best interests. Think you
could lower your monthly payments? Contact us -
we'll let you know!
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
193 McKenzie Towne Gate SE Calgary, Alberta, Canada
T2Z 4G2
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