Kitchener, ON -- (SBWIRE) -- 09/28/2017 -- You can use a single large loan to pay off multiple loans in a process known as debt consolidation. Combining your debts is a good idea as it is possible to lower interest rates and fees. Different types of loans attract unique interest rates with unsecured loans being the most expensive. Secured loans like mortgages are considered safer investments than personal loans and carry lower interest rates. The team at Mortgage Broker Store can arrange mortgages for debt consolidation in Kitchener.
Advantages of Debt Consolidation Loans
Some people have a difficult time making their monthly debt payments and these people can benefit from a debt consolidation loan. This can be done by putting one's home as collateral to attract low-cost financing from private lenders and banks. These lenders consider mortgages to be less risky because they can simply sell the property if a client is unable to pay. It is also an advantage that with a debt consolidation loan, you will get a larger amount of money than you would with a credit card.
Uses of Debt Consolidation Loans
The use of a debt consolidation loan depends on one's circumstances. Such a loan might have interest only payments making monthly payments even more affordable. Combining all high-interest loans into one that charges lower rates can be a good way of saving money in the long run. When homeowners pay all credit cards and keep up with mortgage payments it can improve their credit score.
Different Ways of Consolidating Debt
Refinancing, getting a first mortgage, and getting second mortgages are some of the debt consolidation methods. A first mortgage can be put on a property that doesn't already have one. If there is a first mortgage and sufficient equity in the home, private lenders may provide the money needed in form of a second mortgage. Mortgage refinancing is the act of replacing an existing loan with a new, larger mortgage. This option is only recommended if it is ultimately cheaper than the existing loan. Before committing to this, borrowers should check all the related fees to ensure they go with the most cost effective option. An experienced mortgage broker can review the situation and advise on which option is best.
Private Lenders Offering Debt Consolidation Loans
Private lenders have more relaxed requirements than banks meaning they can accommodate those who can't get traditional loans. Most people who seek debt consolidation have a habit of nonpayment which makes them a high-risk client for banks. Thankfully private lenders overlook this flaw in making a lending decision as they are interested in real estate. Instead of credit score, private lenders consider the loan to value ratio of a property to be most important. Loan to Value ratio is a metric obtained by dividing the debts by anticipated selling price of a home. If for example your house worth $100,000 has $80,000 in debts the LTV is 80% which is just on the limit set by private lenders. It would be too much of a risk lending to higher LTV than this as it would make it hard to gain anything from the sale of the home
About Ron Alphonso and Mortgage Broker Store
Ron Alphonso is the principal broker and founder of Mortgage Broker Store. He has more than 10 years of experience in the real estate market which he taps into when arranging mortgages for people across Ontario. Mortgage Broker Store services may cities and towns in the province including Innisfil, Uxbridge, Brampton, Vaughan, Georgina, and Kitchener. Ron is a revered name in alternative financing solutions which has led to his being on popular media outlets like Toronto Life, Toronto Star and Global News among others. He might be a busy man but Ron makes a great effort to respond to all financial questions directed at him.
You can email him at email@example.com or contact him directly by calling 416-499-2122.