There are times in life you’ve probably spent more than they should. Don’t feel bad every does it at one time or another.
Credit cards build up, an unexpected expense, you try to pay it off, but it’s near impossible to catch up due to high interest rates…
Did you know…
The minimum monthly repayment on a credit card is not geared towards paying it quickly. If you paid the minimum monthly repayment It would take you over 60 years to pay it off and that’s before you spend a single dollar on the credit card next month.
That’s why plenty of people wonder why they aren’t getting anywhere.
The Banks are setting you up to fail.
In the same way the interest rate and loan term are important, how you manage the debt after consolidating it into your home loan is important.
The aim of consolidating personal debts into your home loan is to pay them off faster. Generally people roll their credit cards, car loans and personal loans into their mortgage to reduce the interest rate.
If the entire reason for consolidating is to reduce your monthly repayments, then this will cost you more in the long run.
This is the thing…
By rolling credit card and personal debt into your home loan, you end up turning short term debt into long term debt.
The best tip I can give you is this…
Roll all your old repayments into one consolidated monthly repayment. Ie; if your current home loan repayment is $2k and your credit card and personal loan repayments were $1k/month, Aim to pay $3k a month on your home loan once debts are consolidated, regardless of the fact your new home loan repayment will be lower.
This allows you to take advantage of the low home loan rate and stay away from the crazy high credit card interest rates.
For more information about consolidating debt into your home loan, please call MC Mortgage Solutions today.
