How to get extra money from your home without selling it
Mortgage payments, car payments, credit card payments… life is expensive.
But what if you could instantly eliminate two of those payments? Suddenly life would become a lot more affordable—even comfortable, wouldn’t it?
With that extra money, maybe you could even start saving towards realizing those dreams that were forever relegated to the backburner (such as taking a 4 over 5 to travel the world—or the ultimate family summer vacation).
So where would all this extra money come from?
One word: you.
No, we’re not being facetious. It’s money you have already earned, only spent more efficiently.
Case and point: the biggest wastes of money are the rates you pay on high-interest debt.
Did you know that many credit cards charge 19% interest? Some department stores can charge interest rates as high as 28% on a balance that’s carried from month-to-month.
You don’t need to be a math teacher to figure out that all those exorbitant rates add up to highway robbery.
Furthermore, if you don’t pay within the 21-day grace period, most credit cards charge compound interest (interest added to the principal amount you originally borrowed).
The best way to break free from being a slave to high-interest debt payments would obviously be to pay off all of that debt in one fell swoop. If only that was possible… wait, it is.
Your home is the key to finding the funds to pay off your high-interest debt load.
It’s true. Getting extra money from your home is actually a simple process and doesn’t involve selling it (and is far more profitable than rummaging the couch cushions for loose change).
The process is called a debt consolidation mortgage.
A debt consolidation mortgage incorporates your multiple high-interest loans and credit cards into one easy and affordable mortgage payment.
Here’s an example of how a debt consolidation mortgage is saving one education member over $350/month:
| Payments before consolidation | Outstanding Amounts** | Interest Rates** | Monthly Payments |
|---|---|---|---|
| Mortgage | $241,000* | 3.99% | $1,455 |
| Credit Card Debt | $52,000 | 19% | $823 |
| Dept Store Card | $3,400 | 28% | $79 |
| Total | $296,400 | $2,357 |
| Payments after consolidation | Outstanding Amount** | Interest Rates** | Monthly Payments |
|---|---|---|---|
| Mortgage (including credit card and dept store card) | $296,400* | 5.14% | $1,970 |
Total monthly savings: $387!
*With mortgage amortized over 20 years.
**The amounts and interest rates are used for illustration purposes only and may not represent your situation. Assumes that the interest rate remains constant throughout the amortization period. The calculations do not include mortgage prepayment penalties or other fees (ie: appraisal costs, legal fees, discharge fee) associated with a refinance. The calculated monthly savings may be lower if such prepayment penalties or fees are payable.
Another benefit to ‘consolidation’ besides the monetary: simplicity.
By absorbing all of your high-interest debt into your mortgage, not only will you be saving loads of money—you’ll be saving yourself loads of hassle and stress. Recordkeeping becomes simpler. You’ll receive fewer monthly statements and bills (i.e. multiple statements become ONE). Plus you’ll gain a feeling of freedom and achievement. No longer will overwhelming monthly debt payments hold you back. All those financial goals that were once far off in the distance—they’ll finally be within your reach.
Ready to maximize your own financial benefits of owning a home? We can help with that.
At Educators Financial Group, not only can we show you how to make the most of every dollar—we can make sure that plan makes the most sense for you as an education member. That’s because we understand all of the unique elements that make up your professional world (such as compensation structures, pension plans, gratuities, and more).
Working exclusively with the members of the education community since 1975, we can provide you with the right mortgage solution based on your specific needs and financial situation.
Let’s chat about a mortgage that’s in your best interest: have one of our mortgage agents contact you about getting the biggest bang from your buck.
Looking for more cost-cutting tips that could add up to another $500 a month in savings? Click here.
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