If you are noticing that every year your level of debt with mortgages, personal loans, credit card, store cards, car loans, and school fees is rising? Take stock now and do something before it’s too late. Credit cards and personal loan creep is a credit rating destroyer. In a tight credit market you are rapidly closing off the options to getting help. Take positive and wealth creation action to eliminate debt completely. Procrastinate and the solution often will pass you by.
Do you own a home, are not behind in mortgage repayments or having defaults listed on credit reports?
Step one. Establish your current position of the equity in your home.
- Value of home………………….$………..
- Current mortgage…………….$………..
If the portion of the loan to the value of the house is less than 80% read on. If not contact a Mortgage Broker.
Step two – Establish your total debt
- Total balance currently owed on all mortgages, credit cards, store cards, personal loans, car loans. $……..
- Total monthly payments on all mortgages, credit cards, store cards, personal loans, car loans $……..
Step three A Mortgage Broker will assist you through this next process
The Broker will need all the above information that you have calculated.
- The Mortgage Broker calculates what percentage of debt can be consolidated.
- The Mortgage Broker will tell you what your consolidated mortgage repayment will be (the new mortgage)
- The Mortgage Broker will calculate what lender is the most suitable for you to create wealth.
- Together you estimate the consolidated saving of the debt consolidation.
- i.e. Old monthly loan payments – new loan amount = consolidate debt surplus
- Commit to paying the consolidate debt surplus into your new loan AS an additional LOAN REPAYMENT.
I am now going to demonstrate the real power of using the consolidated surplus wisely. This is an example of a person or couple who are employees and all the income is fully taxed.
- Take your payment on the new mortgage as $1627 per month
- Take your consolidated debt surplus as $1050 per month.
- You make the decision to put the $1050 a month into the mortgage each month.
- Your mortgage is $300,000
- Interest rate is 5.09%
You now have serious financial choices.
- Do nothing and pay off the loan in 13 years.
- In 12 months you would have $12,336 in savings accrued in your mortgage. This is called mortgage equity. You have the right to use this as you think fit without any ones permission. You can redraw your mortgage equity at any time
- In 24 months you would have $26,314 in redraw mortgage equity.
- In 36 months you would have $38,973 in redraw mortgage equity.
- In 60 months you would have $68,454 in redraw mortgage equity.
Now you have a problem. Not a bad one for a change.
You need a financial planner to see what are the best options of the use of this money. Investments, superannuation, real estate investment. You have gone from seeing no hope because of rising debts to having to seek professional advice on investments. To say nothing of your credit rating.
Think about this. What other plan do you have create this wealth?
- You are using your mortgage repayments, which you were going to pay anyway.
- And you are using your old debt repayments WHICH YOU WOULD HAVE HAD TO PAY ANYWAY.
The question now is what would be the attitude around the home if you had $68,454 in accessible cash and no credit cards, or loans?
Now you have the facts to plan moving forward. So don’t talk yourself out of seeing a Mortgage Broker. There is always a plan B. Sitting and doing nothing only increases the stress and anxiety, not a good option contact a Mortgage Broker today to get the process started.