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Debt Consolidation

Brandon Nishi | Your Trusted Mortgage Advisor

Vancouver | Burnaby | Tri-Cities | Surrey | Langley

What is Debt Consolidation?

Debt consolidation is combining all your small debts into one bigger loan to make managing your finances easier. Instead of dealing with multiple lenders, high interest, and different due dates, you get a single manageable loan to pay off all your debts.
 

We would look to pay off all your high interest debt, using one, low interest mortgage
 

The benefits of debt consolidation would include:
 

One Monthly Payment

Lower Interest Rate

Extended Repayment Term

Can help restore credit

If you own a home but you're struggling to pay them off, continue reading as debt consolidation may be the best route for you.

Step-by-Step Guide for
Debt Consolidation

1

How much home equity do you have?

As we're pursuing debt consolidation through secured lending, which involves using your home as collateral, it's crucial to determine the amount of equity available for this purpose. Typically, lenders may allow homeowners to leverage up to 80% of their home's value. However, we need to take into account your existing mortgage as well. Let's calculate your total usable equity together!

Calculations for useable equity

1. What's your current home value? Example: $500,000

2. Get 80% of your total home value: $500,000 x 0.80% = $400,000

3.What's your current mortgage? Example: $200,000

4. 80% of your home value - your current mortgage: $400,000 - $200,000 = $200,000 of useable equity

Illustration demonstrating Calculating your home equity i
2

How much debt do you need to consolidate?

Listing your existing debts doesn't need to be overly complicated. However, it's essential to provide some critical details to determine whether debt consolidation is the right financial decision. These details include:

  1. Total Amount Owed: The overall sum you owe for all your debts combined.

  2. Interest Rate: The annual interest rate associated with each debt.

  3. Repayment Terms: The agreed-upon timeframes and terms for repaying each debt."

Planning out your monthly debts

*Minimum Monthly Payments: This is including only the interest due if additional repayment is not made on all the high interest loans except for the car financing.

Great! Now that you've calculated your total debt and have a clear understanding of your current minimum monthly payments, it's time to explore the debt consolidation options that may be suitable for your situation.

3

What option do you have?

This is the right time to connect with a mortgage broker. Whether we meet in person, talk on the phone, or communicate via email, our goal is to assess your unique situation and identify the most suitable mortgage option for you.
 

When it comes to consolidating your high-interest loans, there are three main options to consider:

Refinancing refers to the process of replacing an existing mortgage, with a new one that usually offers better terms or conditions. Refinancing may be one of the most cost efficient options, especially if your term is ending soon.

Imagine getting one big mortgage, to pay off your existing mortgage + high interest loan

Illustration showing debt consolidation via refinancing
4

What's the next step?
Call your mortgage broker!

Ready to become debt free? Let's set up a time and go over your options! 

1. Let's assess your current financial situation

2. Figure out the best debt consolidation route

3. Talk about the application and process

Consultations are free and easy! Get started through my contact page, or please feel free to give me a call or email at any time.

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