How Your Home Could Help You Pay Off Your Debts

How Your Home Could Help You Pay Off Your Debts

For many Canadians, managing money is a stressful ordeal. When you’re mired in debt, it’s even more difficult.

You’re not alone, though. A recent survey by the Desjardins Group indicated that only 50% of respondents could take care of their needs and pay their bills for more than three months without relying on credit, while 14% would not last a month in cases of emergency such as job loss, accident or illness.

And if you think your income isn’t high enough, think again. Only 55% of those who made more than $55,000 a year said they could last over three months if something happened to that income.

Schools are starting to teach young people about budgets as early as the third grade, and secondary schools are revamping their courses to include money management and investment. That’s good for future generations, but what about now?

There are a few steps you can take before heading to a bankruptcy trustee. First, it’s important to get the best advice for your particular situation. That may include talking to a financial counsellor who can assess your situation and help you set up a budget.

Or you can talk to me about a debt consolidation loan using the equity in your home. You may have enough equity in your home to pay off your high-interest debt with a lower-interest remortgage. You’ll be able to save thousands of dollars in interest. By using a mortgage as a debt consolidation tool and freeing up your cash flow, you will also be in a better position to take advantage of your prepayment privileges to pay off your mortgage more quickly.

Guy Ward is a Mortgage Associate in Calgary, Alberta with TMG (The Mortgage Group Alberta).