Consolidating debt with a home equity line of credit (HELOC) or by using 2nd mortgages is a simple strategy to implement and has multiple benefits. Consolidating debt from various sources into a single loan means that you can amortize a single monthly payment over a fixed period of time at much lower mortgage rates of interest. Some of the advantages to this strategy include:
- Consolidate debt to pay more principal and less interest and reduce debts faster.
- Decreased monthly payments improve your cash flow so you can stop playing catch up and start getting ahead.
- Instead of juggling multiple bills, you make one payment each month – freeing up time and reducing stress.
- Get multiple creditors and collection agencies off your back.
Second mortgages come with a wide range of benefits for borrowers. Being able to get rid of high-interest debt, repairing credit, completing home renovation projects, funding college, and starting up a business are just a few of the things that can be done with a second mortgage.
What is a Second Mortgage?
Second mortgages are loans that can be applied to either residential or commercial buildings.
These loans sit in the second position, behind the first mortgage loan on the property.
Second mortgages can be easily obtained once the property owner has built up enough equity in their home or business.
By tapping into the equity already accumulated, home and business owners can borrow from money that is already theirs.
Has your property value recently gone up? Or do you nearly have that first mortgage entirely paid off?
Contact me to see how much of your equity you can tap into.
Posted by Steven Porter. Steven is a licensed Mortgage Agent with Mortgage Architects and a retired licensed, real estate broker with 30 years experience in residential real estate. He can be reached at 1-905-875-2582; steven.porter@mtgarc.ca or online at 1800Mortgages.ca
