Consolidating debt with your mortgage dating agency cyrano 3 4 5
Re-mortgaging may also be an option that your lender can explain to you.
It may allow you to keep a low interest rate, only have one mortgage payment and still give you funds to pay off other debts.
Ever since the early 1980's mortgage rates have been declining in Canada.
They peaked at over 20% at that time but are now typically offered in the 3% - 6% range.
The average five year mortgage rate over the past 60 years has been 8.95%.
So if you are considering refinancing your home, make sure you can afford an "average" interest rate of 9% in the long term.
A "Home Equity Loan", "Home Equity Line","refinancing your mortgage / re-mortgage" and getting a "second mortgage" are all different names for the same thing and are sometimes used as a debt consolidation option.
These terms refer to the bank lending you money against the portion of your home that you own.
High interest loans like these can be used as a tool to get you from point A to point B, but you should do your best to find a better arrangement as fast as possible.What does using home equity to consolidate your debts mean?Essentially it is using the equity in your home / refinancing your home to consolidate your debts into one payment in order to pay off your debts.You could also sell your house to pay off debts, though this should be a last resort and pertain to your situation, e.g. There are things to know before using your home equity line, so to choose the best way / option that fits your situation, especially if you're retired and your income has changed, talk to a trusted, accredited non-profit Credit Counsellor.Sometimes you can get the same interest rate on your second mortgage as you got on your first mortgage, but this isn't always possible (talk to your lender to find out more).