Lower Payments With Home Equity Loan
One way to think of financial freedom is how many months you can go without earning any income and still pay all of your living, debt, and entertainment expenses. The more months of expenses you have in savings the better you will feel. If you spend $2,500 per month and had $15,000 in savings, you could live the way you do today for 6 months before needing another paycheck. You can use this time to do whatever it is that you want or need to do because it is free time.
It is difficult to feel any freedom when you are living paycheck to paycheck.
Does this sound familiar: You receive your hard-earned pay check, deposit it into your bank account and pay your important bills like your mortgage, insurance, heat, power. Then you have your car payment, which could almost be considered a non negotiable because you need a reliable vehicle to get to and from work. There is also those monthly payments for the couch and new tv.
Does it feel like you are drowning in debt? Does payday come and go in the blink of an eye, without you ever getting to enjoy your hard-earned money? Does it feel like you aren’t making a dent in the debt you have? If most of the money you make goes to debt payments and living expenses you may feel stressed.
There is a solution, and you’ve been closer than you think.
Every time you make a payment to your mortgage, you are owning a little bit more of your home. Over the years, that can add up to thousands and hundreds of thousands of dollars. That money is just sitting there, tied up in your home. If only there was a way to use your equity to help you now? Well there is some good and bad news.
The bad news is banks in Canada are turning down borrowers at very high rates due to the new mortgage stress test. At the time borrowers need the bank most is when they are being declined for their financial needs. You are not alone.
Fortunately, with private lenders, you can actually borrow money using the equity you have in your home and use that to consolidate all your other debts. Credit cards, car payments, CRA, and payday loans.
As you are consolidating your payments into one and stretching them over many years in the form of a mortgage, your monthly payments could be hundreds if not thousands of dollars lower than what you are paying now. Consolidating and lowering your monthly payments is one tool in your belt available to manager your finances and to make living more manageable.