Tackling financial woes in the New Year

Jean-Guy Turcotte

With 2010 behind us, the excitement of a New Year is once again upon us. Surely you’ve read many articles and columns that have mentioned the best ways to begin your New Year resolutions and financial hangovers are just as popular as the weight loss resolutions. Many writers seem to talk about the Christmas credit card bill hangovers, but we all know that it wasn’t just Christmas bills that have stung us.

The usual reasons are the most common, however because of the past couple of years in the global economy even more Albertan families have been affected than usual. Many have been able to weather their own financial storms; however some did turn into Katrina like catastrophes while others were more like windstorms.

Even if you’ve had the displeasure of a minor windstorm, usually the only benefactor from your weather anomaly was the credit card companies, and even though you’ve used many prohibitive words to describe them you are the type of person that just won t let it fall into negative territory and let it get behind. Unfortunately, those colourful descriptive words still won’t get you out of the woods.

If you are like most Canadians, you’ll wait until the New Year to truly deal with the task at hand. And that s fine, as long as you truly accept that change needs to occur.

Don’t feel alone, almost daily I speak with someone that is in your situation, and if it’s not too late, then realistically I can probably help your situation if you have equity in your home.

The following example is a client of mine that I helped last week. Peter (fictional names) has worked for a large international service company in the oilfields and his wife Lois works for the government. Both of them have been at their respective employers for many years and are in middle management positions.

Their monthly mortgage and credit card payments prior to their new mortgage was $2849/month and even though her salary was steady, they were used to his income being in the $80k plus range, but for the past couple of years they were just getting by on his base salary as work bonuses weren’t that regular and even though they were never late on anything they haven’t been able to get ahead, and were simply tired of it.

With today’s amazing rates we were able to consolidate their existing Line of Credit and credit card debt of $38,000.00 to their current mortgage amount. The lender we chose had a rate that saved them over 1.50% off of their existing mortgage and in total they ended up saving$1058/month!

To maximize their savings we increased their amortization to 35 years, but once their incomes are back to normal, if prudent, they’ll be able to really tackle their mortgage debt.

Now I’m very aware that adding time to your mortgage isn’t a strategy that we normally like to advise, but to get them out of the difficult situation that they were in -paycheque to paycheque- isn’t healthy either.

Difficult times call for difficult measures and if you’ve been able to make it through these tough times, then don’t let pride get in your way, make this your year for change so that you can live a healthier stress free lifestyle.

Jean-Guy Turcotte is an Accredited Mortgage Professional with his partners at Dominion Lending Centres-Regional Mortgage Group and can be contacted for appointments at 403-343-1125, texted to 403-391-2552 or emailed to jturcotte@regionalmortgage.ca.

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