Discuss, Learn & Share

Question

One Comment

1. Paul Sidhu says:

   October 28, 2009 at 8:46 am

   The advantage to consolidating your debts is that they will be applied a lower rate of interest than you are currently being offered through your credit cards. When consolidating your debts, you must have the flexibility of being able to pay down your mortgage faster, otherwise the consolidation will be of no value to you.

   To elaborate, mortgages have top heavy interest, meaning the interest is highest in the first 5 years of a mortgage. If you only plan on making the minimum payments on your mortgage then it could possibly take you 5 years just to bring the principal down to your original amount.

   A flexible mortgage will allow you to overpay up to 20% of your original principal amount at any time during the year rather than on the anniversary date. This way, the payments you would normally make on your credit card payments can be applied directly to the principal of your mortgage and will save you money.

   Paul Sidhu, Principal Mortgage Broker at KTX Financial Ltd.

   Neither Kanetix® nor the KanetixForum.ca is a mortgage broker or agent. Although this information has been passed along to you from KTX Financial through the Forum, we are not responsible for the opinions expressed by them. Mortgages can be complicated. When reading these answers, keep in mind each person’s situation is unique. Individual responses may vary depending on your lender, geographic location, and specific circumstances. If you have a similar situation, always speak with your mortgage provider, or a licensed mortgage representative, for terms and conditions that may apply to you.