Be careful….borrowing costs are real!!
Everyday we get to create happiness, saving people a tremendous amount money with their mortgage needs. Since money is still very inexpensive(to borrow) we are arranging a considerable amount of refinances. People that currently own a home are pulling out equity to complete renovations or consolidate debt.
In this profession, it still amazes us on how many people do not realise the cost implications of carrying high interest debt.
Everyone that owns a home should have a debt assessment done(we do them for free) in order to try and reduce your borrowing costs. Here is an example of what high interest credit debt can cost you.$20,000 credit card debt @ 20% per year = $334/mth($4,000/year, $20,000 over 5yrs) in INTEREST ONLY.
If we arrange to include the credit card debt in a new mortgage(refinance) the $20K will now incur a substantially lower interest rate(around 4% as of today). The savings of 16% interest per year is BIG….. $267/mth, $3,200/yr or $16,000 over 5 years. So even if it costs the borrower about $1200 (appraisal and legal fees) and perhaps a small penalty to break an existing mortgage you can see how lucrative the savings are. Any of the legal fees and penalty to break can be taken out of the advance of the new mortgage so the borrower does not incur any out-of-pocket expense(nice bonus).
Our credit card scenario above was just one example however we have seen many applications where the household debt is considerably higher than $20K. Personal loans, lines of credits, specialty credit cards and student loans can all be included in a refinance for even greater savings. I am sure you would agree that money in your pocket is better than in someone else’s. Just another way we create happiness! Thanks for reading.