Mortgage Matters: Financial Solutions Moving into 2024

Now that the Holiday Season has passed it’s time to review your finances and plan for 2024 financial goals and budget. In my December article, Quick Tips for Holiday Spending, we discussed an initial budget for the Holiday Season and a few guidelines to assist your finances.

Next an overview of all your debts should be taken into consideration, you should list the actual balances on all your credit cards and line of credit. You will note that the average credit card charges an interest rate of 21% and lines of credit 9%, the interest costs will add up quickly.

For those of you that are expecting additional funds such as a year end bonus, overtime pay, family gift etc it is wise to pay off your credit card(s) debt first. If this is not the case then you may pay off your credit card(s) with your unsecured line of credit or open Mortgage Line of Credit.

It is imperative that you make your minimum monthly payments on all creditors to ensure your credit and credit score are not negatively effected; remember 1 day late = 30 days late.

If the debt is substantial then considering paying it off with mortgage product will save you interest costs especially since the predictions of mortgage rates continuing to decline well into the summer season poses an opportunity for savings.

Here are some questions to ask your current mortgage lender;

1. What is my mortgage penalty if I require to refinance my mortgage? and what are extra costs incurred to do so?
2. Would I qualify for a open Mortgage Line of Credit rather than break my existing mortgage?
3. Do you offer “top up” on my existing mortgage? For example your original mortgage was for $550,000.00 and your current balance is $500,000.00…does your lender offer the option to increase your balance back to $550,000.00 without making any material changes to your mortgage (no mortgage penalty, no lawyer fees, no appraisal fee etc).
4. Do you offer a “blend and extend” option? For example does your lender offer the option to increase your mortgage and averaging your rate with current mortgage rates maintaining the same term by not extending the term with no additional fees.

Do your research ensure you are dealing with a qualified, trusted mortgage professional.

My next article will review in depth options for debt consolidations.