Have your debts have risen following a drop in your income, a separation, or another challenging situation? The interest rate on credit cards and personal lines of credit can prove very high and the minimum monthly payments only cover the interest. Consolidating these debts through mortgage refinancing is often a simple solution to your problem.
Your personal debts are now at the same rate as your mortgage and are now amortized over a longer term, thereby greatly reducing your payments.
You will be able to refinance up to 80 percent of your property’s value. This value will be appraised by the lending institution and the difference between the amount of your current loan and that corresponding to 80 percent of your property’s value will be the equity available for use to repay your debts.
Example: You bought a property at $200,000. Since the purchase, its value has increased to $220,000. You have $150,000 remaining on the mortgage. For debt consolidation, you can access: $220,000 - $150,000 = $70,000 X 0.80 = $56,000.