Is It a Good Idea to Consolidate Debt Into a Mortgage?
Why is it called Blue Monday?
Here are a Few Reasons to Consider Refinancing:
- HELOC/ Unsecured Lines of Credit interest rates have increased significantly (variable-rate)
- Having trouble making the minimum Credit Card Payments, Personal Loans or paying your Vehicle Loan?
- Need to Free up funds to purchase life necessities like food, utilities, schooling, etc. (Monthly Budget)
- Currently in a variable-rate mortgage, want to stabilize your payments
- Lower Interest Rates then on LOC’s (average 7.5%-9%) and Credit Cards (average 17%-21%)
- Ease Money Stress on Close Relationships. Money issues often are one of the top disputes in a household. Especially, if one person is a spender.
- Considering missing mortgage payments or defaulting on your mortgage.
Below are Good Guidelines to Follow:
- Housing – 35% of your monthly income
- Transit – 15% of your monthly income
- Debt – 15% of your monthly income
- Savings – 10% of your monthly income
- Life – 25% of your monthly income
Because everyone’s debt is a little different, you’ll need to put together an accurate monthly budget to know how much cash is coming in and going out.
CMHC Debt Service Calculator — Compare your monthly debt payments and housing expenses to your gross household income. Here
Your Next Steps for Debt Consolidation: It’s key to remember that even though your consumer debt may feel overwhelming, there are options available to help reduce that monthly burden.
Consolidate Debt Into a Mortgage – Other Steps You Should Consider:
- Research all your financial options thoroughly before taking any action
- Review your monthly cash flow and trim away any unnecessary spending first
- Talk to a Mortgage Broker about current refinancing rates, product options, potential early payout penalties, etc.
- Build a realistic plan that gets you out of debt in the least expensive way