Many homeowners are concerned about their cash flow. This can happen when there is not enough money coming into the household to keep up, or even catch up, to the ongoing expenses. This can easily happen with the convenience of today’s higher interest credit cards and consumer credit accounts.
Generally speaking your monthly total debt payments should be 40% or less of your monthly gross income (before tax deductions). If this is not the case it would be wise to review your cash flow situation and if necessary start taking corrective action.
A strategy homeowners can use is to refinance their existing debts into one new mortgage.
With mortgage rates at all time lows, and home prices on the rise, refinancing your mortgage can make the best financial sense.
The illustration below shows how a monthly savings of over $1250 dollars has been created by refinancing and consolidating debts into one new mortgage payment.
The additional money can be used to begin or add to a saving program such as RRSP or TFSA or you can use it to increase your mortgage payment and become mortgage free sooner!
Lenders have programs that will allow homeowners to refinance up to 85% of your home’s value.
|Description||Current Balance||Monthly Payment|
|5 year fixed rate of 3.69%. Rates are subject to change without notice. Please contact us for full details.|
|Current Mortgage @ 5.75%||$170,000||$1063|
|Personal Line of Credit||$20,000||$600|
|Mortgage Pre-payment Penalty||$3000||N/A|
|New 5 Year Mortgage||$215,000||$1095|
|New Monthly Saving||N/A||$1253|