With our society heavily dependent on the use of credit cards and the economy not completely turned around, there is a certain amount of debt servicing challenges on both short term credit card debt and long term residential home mortgage financing obligations.
If want to try and refinance debt, there are a number of different things you can consider.
The first thing to consider is lower cost debt refinancing actions. If overall you have a reasonable amount of debt to manage, you’re up to date on your payments, and your credit is still in good shape, then you can basically look at moving your debt from one or more lenders into a new loan provided by another source that you can qualify for.
Depending on the amount of deb refinancing required, you may be able to achieve this through unsecured debt such as low interest rate credit cards that offer a low interest rate to allow you transfer existing balances over to them from higher cost facilities. You can also consider secured debt options where assets are pledged as security to the lender to support the amount of financing provided.
The keys here once again are that you have the cash flow, credit rating, and total debt level that can qualify for debt financing with another lender.
If, on the other hand, any of these three areas are in distress, then simply moving your debt load over to a lower cost lender is going to be less likely.
Banks and institutional lenders are not overly interested in taking on another lender’s bad credit loans and bad credit mortgages.
If you are in more of a distressed situation where you have incurred late payments already and/or you are now behind in your payment obligations, then your next best options are going to be in the form of a home equity loan from a private mortgage lender.
A private mortgage either in first mortgage or second mortgage financing position, can allow you to borrow against the equity of your home, up to 80% of its fair market value.
Utilizing a Toronto private mortgage lender is only going to be a sort term solution as most private mortgages are only provided for a period of one year. But debt refinance through a private lender can potentially allow you to consolidate your debts are a lower overall rate of interest and reduce your monthly payment requirements through interest only payments.
This type of debt consolidation loan will buy time to either get your credit and financial profiles in order so you can access cheaper money, or sell off your home in a timely fashion in order to get the most for it and use part of the proceeds to pay off your debt commitments.