Proper debt consolidation lowers your monthly payments

There are many benefits to debt consolidation, and the first one is the possibility to lower your monthly payments. Consequently, this improves your financial cash flow and keeps more money in your pocket for other things that matter. Ultimately, a debt consolidation when done right has the potential to improve your qualify of life.

Proper debt consolidation improves your quality of life

The improvement to your qualify of life is beyond just financial well-being, but it includes peace of mind. For example, if you are juggling payment for several credit card balances, you are living under lots of stress with multiple billing due dates to meet. Remove this stress trigger from your life by consolidating all of your credit card balances into one simple payment at a lower interest rate. You can win financially and mentally over mounting credit card debts. Debt consolidation can do this for you when it is done right.

Proper debt consolidation improves your credit score

In addition to lowering your monthly payments, the best part about debt consolidation is that it can improve your credit score, and thus your credit history.

When debt consolidation simplifies and lowers your debt services, you are more likely to pay your bills on time and in full every time. Your credit score is a reflection of several transactions that build up a picture of your responsibility in paying down your debts. As you consistently pay your bills on time, you are improving your credit score and building your credit history into a much better picture as an AAA borrower.

Improper debt consolidation increases your borrowing costs

It is possible that you could find yourself in even worse financial situations than before you started debt consolidation. Your goal with debt consolidation is to put your finances in order. Although debt consolidation can help you reduce your monthly repayments, it can also increase your borrowing costs if you are not careful with choosing the right mortgage product and lender.

A proper debt consolidation plan can make or break your mortgage in the future

A successful debt consolidation relies on the details of your plan. The right plan can positively affect your chances of getting a better mortgage in the future. For example, if you’re worried about missing a payment, you should consider a plan that will allow you to keep the debt services well below your income so you can make all of your payments on time. Consistent behaviour of paying bills on time and in full will reflect positively in higher credit scores. Higher credit scores give you a better chance of qualifying for better mortgage terms and lower interest rates because you are a AAA borrower.

If you’re unsure of your budget, it is essential to consult with a licensed mortgage broker to make sure the plan is suited to your needs.

Frequently asked questions on how debt consolidation affects your mortgage

Can I get a mortgage and consolidate debt?

You can consolidate your debt before applying for a mortgage. You should keep in mind that it won’t hurt your qualification because you’re simply arranging all of your debts into one loan to be repaid. In many cases, it may even help you get approved because your payments will be smaller, which improves your debt-to-income ratio. Make sure that you continue paying your consolidated loan on time.

Will debt settlement affect your mortgage?

A debt settlement is different from debt consolidation. That a debt settlement may render you unable to qualify for a mortgage until it is fully discharged. Debt settlement involves actuating a Consumer Proposal or declaring bankruptcy. In either case, it will show up in your credit report and be seen by underwriters when qualifying you for a mortgage. Almost all lenders will require that you have discharged your debt settlement before applying for a mortgage.

Work with Matrix Mortgage Global

Matrix Mortgage Global (Lic. #11108) has access to over 100 different lenders. You have access to a wide range of lending partners who are ready to offer you various mortgage solutions, including mortgage renewals, refinancing, second mortgages, home equity loans, bridge loans, and other specialized mortgage products.

Does consolidation ruin your credit?

Debt consolidation does not ruin your credit when it is done right. First, you want to make sure that you have identified all the sources of your debts. Second, you want to consolidate all of them into one mortgage loan with lower payments. Lastly, pay off all of your debts, and close all of them except the oldest credit card you have on file.

Jermaine Hinds, Mortgage Broker Offers Personalized Solutions for Home Buyers and Homeowners

Jermaine Hinds, Mortgage Broker believes in delivering results to clients with their best rate and solutions possible.  He has built his reputation around helping people and getting them mortgage financing that fits their situations for the long term. The collective knowledge and experience from Jermaine and his team will help you achieve generational wealth through real estate.