As a homeowner, how do you know when it’s time to refinance your mortgage? Here are some factors to consider when making this decision.
It’s time to start dealing with your holiday debt!
Is post-holiday debt getting you down? This point in January can feel especially difficult as more and more holiday bills are making their way to you. After the fun and excitement of the holiday season, this can certainly lower your spirits. The good news is there are a few methods that can help many Canadians begin to control their holiday debt. Much of it comes down to strategy, but you can also enlist the help of a mortgage professional if necessary. Here are some tips to help you!
Lay out your debts and make a plan
Many Canadians are likely going through January knowing holiday bills are coming their way, and also knowing they won’t like what they see. It can be scary to know debts are coming, but the best way to deal with holiday debt is to face it head-on. Once you have your bills, lay them out in front of you. Examine payment dates, minimum required payments, and the interest rates. From here, you can form your payment strategy. Paying off high-interest debts is important, and is often a priority. This is because the longer you leave these debts unpaid, the more interest you collect, meaning the more money you will owe. However, do not JUST focus on high-interest payments and ignore your other debts. Leaving multiple debts unpaid will result in late fees and charges. Instead, try to make the minimum payment on all your debts, across all interest rates. If you can afford it, you can then focus a bit more on your most pressing debts.
Say no to sales
Boxing Day sales are finally over, but you’re still likely to see some sales floating around in stores. From clothing to appliances to groceries and electronics, we’re sure you’ll pass some deals. However, try to resist these sales while you’re paying off holiday debt. Sure, “buy one, get one half off” on your favourite sweater or Bluetooth devices can be tempting, but you’re still spending unnecessary money! A deal is only truly a deal if you’re in real need of the product, such as a specific food you can stock up on. It can help to make a list of items you need to purchase when you leave the house. If a sale pops up for an item that’s not on the list, just keep walking! It’s fine to indulge once in a while, but right now, if you’re struggling with holiday debt, it isn’t quite the time.
Is your home the answer?
Home owners might find they can use their house to their advantage if they’re dealing with post-holiday debt. You may have built up a good amount of home equity, depending on the length of time you’ve been living in your home. In this case, using that equity to help deal with debt can be a good idea. A refinance allows you to access home equity and cash flow, so you can pay off debts, complete renovations, or perform other tasks you need money for. Refinancing so you lengthen your amortization period can also help, as this will mean your monthly payments will be lower. You can use this extra wiggle room to make some essential debt payments. You can read more about using a refinance to help pay off debt here.
Think about next year
Wait, it’s only January! Even so, we know the holiday season comes around at the same time every year, so why not prepare for it early? We don’t mean you should buy all your presents and decorations now, of course, but you can start thinking about how much you spent this past season. Did you want to spend less, or maybe have more saved up to support your expenses? These are things to consider well in advance. If you know how much you’d like to spend next season, you can start contributing small amounts of money to a holiday fund. Once December rolls around again, you’ll have a nice collection of money you can use to buy what you need, and hopefully avoid holiday debts.
Let a broker help!
If your holiday debt feels beyond your control, it might be time to let a broker help you out. While debt can feel overwhelming, it’s nothing to be ashamed of! By seeking assistance from a mortgage professional, you’re doing the right thing and getting your finances back on track. Brokers can help you look into debt consolidation if necessary. This can help you keep better track of your debts, and often lower the interest rate on your existing debts. You can learn more about debt consolidation here. While it might not be the best option for everybody, debt consolidation can help many people get a handle on their finances and bring themselves back to a comfortable position.
Holiday debt is arguably one of the worst parts of starting a new year, and sometimes it’s difficult to get ahead of it. However, the best way to start dealing with your debt is to be strategic about making payments, and accepting help from a professional if you need it. As brokers, we are here to help you achieve your financial goals and find the best path forward. Don’t hesitate to reach out if you want to know how you can use your home to your advantage!
If you have any questions about your mortgage, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.