A Quick Guide to Debt Consolidation for Homeowners
 May 3 2016     Posted by Siemens Group

For those struggling with credit card debts, student debts as well as other debt issues, it can be challenging to ensure day-to-day financial obligations are met while paying off debt over time. The team at Invis – The Siemens Group has many years’ experience helping homeowners consolidate their debts, and in this article, they’ll provide their quick guide to debt consolidation for homeowners.

Consider Adding the Debt to Your Mortgage

One option for those with significant equity is to consolidate their debt into their mortgage financing. Oftentimes, mortgage products have a much lower interest rate than credit cards and other forms of debt and this means that homeowners can reduce their payment costs over time within the consolidation process.

Speak with Lenders about Debt Consolidation Loans

Debt consolidation loans allow those with significant debts to borrow from their lender and then pay off their debt using a product with a lower interest rate. This might be a good option for those that have a large asset they can use as collateral for the loan process. For example, many people choose to use their new vehicle as collateral when requesting debt consolidation loans. This can help to reduce the loan cost over time and reduce the burden of having to pay ever higher debt costs.

Pay Off Higher Interest Loans First

Sometimes homeowners may only be able to take out enough of a loan to cover a portion of their debt. This may mean that they’re then facing the choice over which debt to pay first when payments become due the next month. At this stage, it’s important to pay offer the loan with the highest interest first. That’s because the loan with the highest interest will accrue a large amount of payment fees over time.

Create a Payment Plan

Once the consolidation process has been completed and the lender has provided the means to combine all debt into one monthly payment, homebuyers should create a payment plan. They can work with their lender to create a monthly home budget, which takes income and current obligations into consideration. By doing so, this can help minimize their budgeting stress for the years to come.

Consider Using Cash After the Consolidation Process

When the consolidation process has been completed and a plan is in place to structure finances for the next few months, homeowners might consider simply using cash for the short-term. By using cash, they can limit the urge to go further into debt while taking greater control over spending.

By following the guidance in this article, homeowners can make great strides in consolidating their debts. To discover more, speak with the team at Invis – The Siemens Group directly at 604-351-7438 or visit their business website at www.siemensgroup.ca.