Debt Consolidation Pickering

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     Debt Consolidation Pickering

    Debt Consolidation Pickering Helps to Resolve all Your Debts!

    If you are a person who is struggling with high interest consumer debt, then getting out of it might seem like and impossible to reach dream. And while it is true that getting out of debt can be a challenge, there are strategies that can help you get out of debt faster. One such strategy is something called Debt Consolidation. Contact Leverage Capital to get Debt Consolidation Pickering

    With debt consolidation, you can lower your interest rate, make paying your debts more convenient, lower your monthly debt payments and/or get out of debt more quickly.

    What is debt consolidation?

    Simply put, when you consolidate your debt, you are getting a loan that allows you to pay off all your debts from your various creditors. At this point, you will still owe the same amount of money as you did before however now you are only paying one creditor.
    When you get a debt consolidation loan, you should seek out a loan that has a lower interest rate than the rates you are paying on your other debts. This will allow you to pay more on the principal of your debt each month which means you’ll be able to get out of debt more quickly.
    And if your current debt payments are putting too much strain on your finances each month, this might even allow you to lower your monthly payments and help make your current financial situation a little more comfortable.

    Types of debt consolidation loans

    As you might expect, there are a few different types of debt consolidation loans. If you are a homeowner, one of the best ways to consolidate debt is to use your home equity in the form of a second mortgage or a mortgage refinance.

    If you do not own a home – or if you just haven’t built up enough equity in your home – another option for debt consolidation is an unsecured loan.

    Second Mortgage

    A second mortgage is simply a loan paid out in a lump sum to the borrower that is secured using their home equity. Most lenders will allow a homeowner to borrow up to 80% of their home equity (and there are some who will allow an even higher percentage.)
    When you get a second mortgage, you do not have to break your current mortgage. You will have two mortgage payments – one on your first mortgage, and one on your second. The interest rate on a second mortgage will usually be a little higher than that on your first mortgage, but this rate will still be much lower than most other forms of consumer debt – which makes it a great option for debt consolidation.

    Mortgage Refinance

    Another debt consolidation option that utilizes your home equity in something called a mortgage refinance. This option requires you to break your current mortgage and get a new, higher mortgage that covers the amount of your current mortgage plus gives you enough extra cash to pay off your other debts.

    With a mortgage refinance, you will pay a lower interest rate than you will with a second mortgage. The drawback is that because you are breaking your current mortgage, there will be a financial penalty that you’ll have to pay which could potentially offset your savings.

    The closer that you are to your mortgage renewal date, the less of a penalty you will have to pay. For this reason, those who are fairly close to their mortgage renewal date tend to do better with a mortgage refinance, while those who have recently renewed their mortgage will do better with a second mortgage. If you are not sure which of these options makes more sense for you, you can ask your mortgage broker to run some calculations for you.

    Unsecured debt consolidation loan

    The third option for debt consolidation is to get an unsecured loan. For some – such as those who do not own a home or who do not have sufficient equity in their home – this may be the only option. This is also an option for those who are simply uncomfortable borrowing against their home equity.

    Because unsecured loans are considered riskier investments by lenders, this option is also the most expensive one in terms of interest. Nevertheless, if you have a lot of high interest consumer debt, even an unsecured debt consolidation loan can help save you a lot of money and help you to get out of debt faster.

    Why you should work with a mortgage broker for debt consolidation

    While it is possible to get a debt consolidation loan directly from a lender, it is usually best to work with a mortgage broker. Mortgage brokers will be able to give you the best advice on the type of loan most appropriate for you and they will be able to compare the rates of many different lenders to help make sure you get the lowest interest rate possible. Remember, the lower your rate, the faster you can get out of debt!

    Contact Leverage Capital today!

    If you are interest in applying for a debt consolidation loan, contact Leverage Capital today!