24 | fall 2014 mbabc.ca MortgageBroker
NavigatiNg the sea of consolidation
loans can be more complex than it first
appears. With the banks constantly changing
their lending rules to the scores of secondary
or alternative lenders, mortgage professionals
can find it challenging to determine the best
course of action for their clients. Mortgage
brokers work with many clients who have
multiple credit card accounts, car loans and
lines of credit. With credit card interest rates
hovering as high as 29.9%, it's very difficult
for consumers to pay down or pay off these
cards and in many cases consolidating
accounts, loans and lines of credit into one
loan makes sense.
e benefit of a consolidation loan is not
only the resulting lower monthly payment
but also a substantial interest savings
combined with the ease of one or two monthly
payments. Most people find it is much easier
to budget with a pre-set monthly payment
instead of several varying payments, dates
and interest rates. Mortgage interest rates are
among the lowest borrowing rates available
for consumers, compared to the rates for
unsecured debts such as credit card accounts.
In these cases, consolidation loans where
real property is used as security are usually
the most effective option to help consumers
restructure and pay down debt.
Make it a best practice to
help clients develop better
financial management skills by
explaining how to maximize
this new-found cash flow
Consolidation Benefits
By crystal foti
