Many Quebecers face high levels of debt and are looking for ways to reduce their debt.Here are some possible solutions:Renegotiate the mortgage: If you are unable to repay your monthly mortgage payments, it may be possible to renegotiate your loan with your bank or lender.This may include reducing interest rates, extending the repayment term or consolidating debts.
Consolidate debt: Debt consolidation is an effective strategy for reducing debt.This method consists of consolidating several debts into one, using a personal loan or a credit card with lower interest rates.This can help reduce monthly payments and make financial management easier.Reduce expenses: Set a budget and carefully review your expenses to identify areas where you can save money.This may include reducing entertainment expenses, buying generic brands instead of premium brands, reducing transportation or food expenses, etc.
Consult a credit counselor: If you are having trouble managing your debts, a credit counselor can help you find solutions adapted to your situation.They can provide advice on debt consolidation, reducing expenses, renegotiating loans, etc.
Ultimately, reducing your debt takes time and requires a long-term commitment to maintain a healthy financial position.By working with a credit counselor, carefully reviewing your options, and developing a solid plan of action, you can gradually reduce your debt and regain your financial health.
How to reduce your monthly loan payments?There are several ways to reduce your monthly loan payments, whether before or during the repayment period.Here are some options:Opt for cheaper housing: If your monthly mortgage payments are high, you may consider looking for cheaper housing to reduce the amount borrowed.Condos and semi-detached homes are generally less expensive than single-family homes, and homes in the suburbs can be less expensive than those located downtown.Increase your down payment: The higher your down payment, the lower your monthly payments will be.
In addition, a down payment of more than 20% of the value of the house will allow you to avoid additional mortgage insurance costs.Be sure to consider federal and provincial first-time homebuyer support programs.Find the best interest rate: It is important to compare several offers from financial institutions to find the most advantageous interest rate.Mortgage brokers can help you find the best loan with their expertise in the real estate market.Improve your credit score: The better your credit history, the more likely you are to obtain a favorable interest rate.
To improve your credit rating, be sure to pay off your past debts and reduce your debt-to-equity ratio.A debt consolidation can be a good alternative to rebuild your finances.Spread the repayment period: You can ask your lender to modulate the maturities, which will allow you to reduce your monthly payments.However, this operation will increase the total capital of the loan.Renewing your mortgage: When you renew your mortgage, you can lower your regular payments.You can switch from a variable rate loan to a fixed rate loan, negotiate a new lower annual rate or obtain a prepayable loan.
What is the repurchase of credit and how can it reduce your monthly payments?The repurchase of credit is a process which consists of grouping several credits into a single loan.The financial institution that buys your loans grants you a new contract with a different interest rate and term.When the new credit is secured by real estate, it is called mortgage repurchase or mortgage refinancing.
The repurchase of credit can reduce your monthly payments in several ways:Lower interest rate: By consolidating all your debts into one loan, you benefit from a lower interest rate, which can significantly reduce your monthly payments.Personal loan interest rates generally range between 8 and 10%, or even more for credit cards.By opting for mortgage refinancing, you can take advantage of a rate that does not exceed 6%.Payment flexibility: The new contract gives you more flexibility to pay your monthly payments.The extension of the repayment period allows you to lower the monthly payments and straighten out your financial situation.Reduction of the debt ratio: Debt consolidation allows you to reduce the debt ratio, which can facilitate access to a new loan.
For example, you can start a new real estate project to renovate your house and increase its value.What is the mortgage refinancing limit?Mortgage refinancing lets you use up to 80% of your home equity to borrow money.The net worth or equity of a property is the difference between the current value of the property and the balance you have left to pay.For example:Market value of the property: $300,000 Remaining balance to be paid: $100,000 Equity available= ($300,000 x 80%) - $100,000 = $140,000
4 ways to refinance your mortgageIf you want to reduce your monthly loan payments and improve your financial situation, you can consider the following options:
Mortgage Broker Services: A mortgage broker can help you find the best loan in terms of interest rate and payment flexibility.The broker has a keen sense of negotiation and extensive experience in the field of mortgage refinancing.
Renegotiate your current mortgage. You can renegotiate your current mortgage with your lender for better interest rates and more favorable payment terms.
Switch lenders: You can switch lenders to get a loan with lower interest rates and more flexible payment terms.Using your home equity line of credit:
You can use your home equity line of credit
Written by Kenny Bruton Mortgage Broker