How to Heal Your Credit by Refinancing to Consolidate Debts

How to Heal Your Credit by Refinancing to Consolidate Debts

An average Canadian may owe about $23,035 in non-mortgage debts which means refinancing to consolidate debt may make sense. The higher interest rates from unsecured debt are one of the reasons why some Canadians have bad credit. Fortunately, there is a way to heal your credit with a mortgage refinance.

You can combine all of your non-mortgage debts, especially those with high-interest rates, into one low-interest rate mortgage loan through debt consolidation. By refinancing your mortgage, you will have access to up to 80% of your home equity that you can use to pay off all non-mortgage debts. It’s an effective way to fix your credit and improve your credit rating. 

Should You Refinance to Consolidate Debts?

It can be quite stressful for Canadians to have different payment schedules for their credit cards, auto loans, personal loans, and other non-mortgage loans. This is one of the reasons why some have missed payments. Most unsecured debts also have fairly high-interest rates, and it can be overwhelming. By consolidating your debts, it would be quicker to pay off your loans. Below are the top reasons why Canadians refinance their mortgage to heal their credit. Low-Interest Rates

Most unsecured debts such as personal loans and credit cards have high-interest rates as it doesn’t have collateral. It’s riskier for the lender or banks. By refinancing a mortgage, risks are reduced because of your home as collateral. Therefore, you get lower interest rates from the lender.  

Canadians with lower credit scores also get higher interest rates on their loans or credit cards. By refinancing your mortgage, you won’t have to worry about your credit score. It’s easy to get approved so long as you have more than 20% in your home equity and if your home is in a good location. You Can Combine All Debts Into A Single Payment

By refinancing your mortgage to consolidate your debts, you only have one scheduled loan payment, making it a lot easier to remember. You won’t have to worry about different schedules as you will only have a single payment for all of your loans. You Can  Pay Off Debts Faster

Credit cards have annual fees, overdue fees, and other hidden fees. You’ll really hurt your financial status if you’re not careful. Also, it may take a long time to pay off all loans because of the high-interest rates and missed payments. By refinancing your mortgage, you’ll be able to pay off all your debts faster. The only thing you’ll need to think about is the payment for the refinance mortgage loan. Improve Your Credit Score

If you have a low credit score, refinancing your mortgage for debt consolidation is one of the most effective ways to rebuild your credit. It’s incredibly beneficial for Canadians who have a bad credit score. It’ll give your credit a good boost if you can pay off all of your loans. No More Stress

Debts can be stressful to some people, but you can manage this when you only have one single payment to think about. You’ll be able to take better control of your finances and your personal life. 

Why a Refinance is the Best Way to Go

By refinancing your mortgage, you’ll be able to restructure your debts and get the best payment conditions at the same time. You can save thousands of dollars in interest by refinancing to consolidate your debts. Because you’ll be using your home as collateral, lenders will likely give you lower interest rates to make it manageable for you. We would recommend that you get an expert mortgage professional to get the best options. Speak with us, especially if you have bad credit; we can definitely help you take out a refinance mortgage quickly. 

You only need a few things to get approved for a refinance: enough equity and a good home value. A good credit rating is necessary when you apply through banks, but we can help you get fast approval, albeit you have a bad credit rating. 

How to Refinance Your Mortgage

The first step is to analyze your financial situation and find out how much debt you really owe. Then check whether you have enough equity to pay off your debts. The amount you can borrow depends on how much equity you have. 

It’s also important to determine whether you can afford the monthly repayments of your mortgage. If possible, take out only loans that are enough to pay off your debts to make it easier for you to pay off the refinanced mortgage. Other options you can explore include a home equity line of credit and a second mortgage. However, when it comes to interest rates, a refinanced mortgage will have lower interest rates compared to a home equity line of credit and a second mortgage. 

Work with an expert mortgage professional to help you get fast approval. That’s where we come in — you can always contact us if you have questions. Our expert team is always ready to assist with any mortgage-related question. 

As soon as you’re ready, fill out and submit your loan application and review your mortgage agreement. Consider alternative lending if you’re struggling with your credit score. Let us know if you need help. 

Get in Touch With us Today

Lend Today has been helping out Canadians for several years, obtaining a refinance and other mortgage loans. 

We have a simple application process and a quick turnaround time. You don’t even have to worry if you have bad credit because we can help. 

Lend Today can get you approved for a refinance in 24 hours or even less. So long as you have enough equity, we can guarantee fast approval. 

Apply today or call us for more info.

David Jeffrey