Of Prime Interest: Restructuring your debt can help payments

Kelowna columnists say explore your options if you are looking to restructure your debt

At this time of year we start looking ahead to the coming winter months, Christmas and what 2018 has in store for us all.

We as mortgage consultants look ahead to see what’s in store for the mortgage market. Interest rates are still low and with the upcoming holiday spending it may be time to look at your debt structure. Do you have credit cards, personal loans and unsecured credit lines and finding it difficult to manage payments? Interest rates on credit cards can be as high as 28 per cent and personal loan rates will generally run higher than what you would pay if they were secured by a mortgage on your home. Any unsecured credit is typically two per cent above prime a rate of 5.20 per cent. You are most likely paying more interest than is necessary.

Refinancing your home will depend on the amount of equity you have. You can refinance up to 80 per cent of the value of your home. If your home has a value of $400,000 and your existing mortgage balance is $200,000 you can refinance up to $320,000. If you have four credit cards with balances totaling $50,000, a personal loan of $25,000 and a credit line with a balance of $30,000 on an unsecured basis the total amount is $105,000. You could add that amount into your existing mortgage of $200,000 for a new mortgage of $305,000.

That would simplify the number of payments you would have into one easy payment at a much lower rate of interest. You will eliminate three payments leaving you with one you feel comfortable with. If this is an option to consider keep in mind you can increase you mortgage payment and make lump sum annual payments to ensure you pay down the added debt quickly. You can also increase your monthly payments by 15 to 20 per cent (some lenders allow you up to double your payment) as well as lump sum payments of 15 to 20 per cent of your original mortgage. Add weekly or bi-weekly payments and your mortgage balance will drop even quicker.

Keep in mind the new mortgage rule for stress tests on conventional mortgages will commence on Jan. 1, 2018 so call us to ensure you are able to still qualify to refinance under the existing rules. These new rules to be in place on Jan. 1, 2018 will require that you qualify to refinance your mortgage at a rate two per cent higher than the actual rate you are being charged. For some this could put a refinance out of reach.

Of Prime Interest is a collaboration of mortgage professionals: Trish Balaberde: 250-470-8324; Darwyn Sloat: 250-718-4117; Christine Hawkins: 250-826-2001.

Just Posted

Nomination date set for Kelowna- Lake Country Conservatives

March 2 is the deadline for anyone who wants to run for the federal nomination

Rutland pride spills over

Reaction to a story this weekend was clear and worth a second read

Benches made from wood that posed a fire risk in Lake Country

The parks team is making benches from the trees removed from the Jack Seaton Park

Family Day move a welcome change: poll

Okanagan readers voted that the new date for Family Day in B.C. is a positive change

Huge crack and bang heard as Wood Lake fractures

‘It was roaring across the lake,’ Lake Country woman recounts sound of crack in Wood Lake ice

Trudeau’s principal secretary, Gerald Butts, resigns amid SNC-Lavalin furor

Butts categorically denies the accusation that he or anyone else in the PMO improperly pressured former attorney general Jody Wilson-Raybould

B.C. father and sons launch new trunk-sharing system, ‘Trunkit’

Smiths say peer-to-peer shipping service offers an affordable, green alternative

Lost a ring? This B.C. man will find it for you

Chris Turner founded The Ring Finders, an international directory of metal detector hobbyists

Salmon Arm’s Laura Hall on bronze-winning skating squad

Hall’s team placed third in long track team pursuit at the Canada Winter Games

Poverty coalition has high hopes for B.C. poverty reduction strategy

Funding allocation expected to be released with 2019 budget

‘How did we get here?’: B.C. mom of transplant recipient worries about measles outbreaks

Addison, 7, cannot get a live vaccine because she has a heart transplant

Review: Joie de Vivre a celebration of homegrown talent

The Okanagan Symphony Orchestra concert featured Ernst Schneider

Bashful Balladeers bring voices to Vernon

Despite hiding behind masks, talent shines with this group

NDP Leader Jagmeet Singh calls for public inquiry over SNC-Lavalin questions

Vancouver member of Parliament Jody Wilson-Raybould resigned from cabinet last week

Most Read