How Refinancing Can Help with High-Interest Consumer Debt

How Refinancing Can Help with High-Interest Consumer Debt

How can refinancing help with high-interest consumer debt?

The current economy has stretched a lot of budgets, with inflation driving up the costs of everyday essentials. I’m seeing more and more families weighed down by consumer debt – credit cards with tens of thousands in balances, and lines of credit in the $20,000 range. This type of high-interest debt can trap you, making it difficult to move forward financially. If you’re a homeowner with equity built up, there may be a way to make your finances more manageable

Why Refinancing Might Be a Solution for Debt Management

High-interest consumer debt, such as credit card balances, can carry interest rates of 20% or more, making it challenging to pay down principal balances. If you’ve owned your home for a while and built up equity, refinancing your mortgage could allow you to consolidate this debt. By rolling consumer debt into your mortgage, you might be able to reduce your monthly interest payments and improve cash flow.

How to Make Refinancing Work for You

Refinancing isn’t always an ideal solution – it’s essentially a debt shuffle, moving consumer debt into your mortgage. However, with mortgage rates typically lower than credit card rates, this move can help reduce your interest burden. To make the most of refinancing, consider increasing your mortgage payments to pay down the added debt faster, instead of stretching it out over the full mortgage term.

Should You Consider Refinancing?

If you’re carrying significant consumer debt and own your home, refinancing might be a smart way to improve your financial situation. While it’s not the answer for everyone, consolidating debt can ease your monthly expenses and free up cash flow.

If you’re looking to get pre-approved for a mortgage to buy a property in Edmonton, fill out my online application. I’m here to help you every step of the way.

About Jason Scott, Edmonton Mortgage Broker

Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.

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