In an advisory article published on the company’s website, DLC accredited mortgage professional Jordan Thomson said that any home with great equity represents untapped wealth that can certainly assist in the rebalancing of one’s debts.
“I recently helped a client who had maxed out her high interest credit cards due to not being able to work for a couple of years, and the credit card debt had lowered her credit score substantially. She was now back to work as a self-employed consultant earning a good income, but the $1,000 monthly interest payments she was paying was seriously eating at her cash flow and not reducing the principal she owed,” Thomson said of a Vancouver consumer.
Fortunately for the client, her condo unit held great equity, which allowed Thomson to propose an Equity Take Out Mortgage as an option.
“The mortgage lender I chose was able to loan her money based on the strength of her property and the low loan to value of the mortgage based on her equity, NOT her income or credit score,” Thomson explained.
The $75,000 package that was eventually agreed upon would allow the client to save up to $574.41 per month, with a monthly payment of $425.59 on a 4.75 per cent rate.
This arrangement allowed the client to get out of the financial pitfall that she had been suffering from, Thomson said.
“In this case, my client was able to pay off her credit card debt and had a fair amount of money left over to invest in her business and her future,” Thomson concluded. “In the end, she was very happy to be able to get her finances and business back on track, and start her life anew!”
With the ever-rising costs of living, getting into a bad financial situation is becoming a more common occurrence for Canada’s beleaguered home owners, but Dominion Lending Centres argues that one’s home can actually help in a pinch.