Bringing debt under control

When you put your head down on your pillow at night to go to sleep do you find your mind racing because the credit card or line of credit balances are nagging at you and you are having a tough time paying them down?

If so, and you own a home with equity you’ve likely thought about using it to pay them down, but then also thought that it may be better just to handle them without touching your mortgage and living even tighter than you already are.

Well you definitely aren’t alone, many of my clients that have finally fought off their pride and called for me to review their mortgage and finances have actually told me that it took them between three and four months before they could muster up the courage to call.

People feel that they have failed themselves and feel alone like there is nothing that can help them when in reality their home’s equity can be a safety catch. Usually the high balances aren’t due to buying too many shoes, it’s usually circumstantial – maybe one of the income earners in the house has lost a job or their hours have been cut at their job in the recent past economy, perhaps a family illness caused higher expenses than normal, maybe you’ve become self-employed and your income isn’t as high as it was and expenses just got away on you.

Whatever the reason, most busy full time mortgage professionals have seen almost every situation imaginable and at minimum can provide guidance for what steps to take to solve the problem.

To most their situation feels dire and they feel helpless.

What I’ve found is if you’ve already earned homeownership then the mindset to get back to a savings plan instead of just paying the bills may not be as difficult as you’ve once thought.

I’ve been able to help people restructure their debts and save hundreds of dollars a month, and the funny thing is, with this extremely low interest rate environment it is easier than ever to do. One particular client had a little over $3,200/month in payments – this included mortgage, credit cards and lines of credits. We were able to reduce their payments to only $1,750/month while paying off all of their cards and LOC’s and save them thousands of dollars of interest at the same time by lowering their rate from 3.79% to 2.69% today. Yes their mortgage balance is higher, but with this low interest rate market they can actually take some time to breathe, regroup and put a plan of attack to get their mortgage balance down over the years to come.

This is just one example of how mortgage professionals can help, whatever your reason, don’t be afraid to call one, a good mortgage agent isn’t judgemental and will take the time to help you, even if it’s just guidance you need.

If you’ve been sitting on the fence and worrying about your finances with sleepless nights, it’s likely time you speak to a mortgage professional because there’s more to life than your mortgage and your bills and interest couldn’t really get better.

You may be able to get everything under control sooner rather than later or at least have a better understanding of where you stand and walk away with a plan of attack for the months and years to come.

Jean-Guy Turcotte is a mortgage broker with Dominion Lending Centres – Regional Mortgage Group in Red Deer.

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