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Many homeowners struggle with great amountsof debt as credit cards, medical bills and other loans loom dauntingly, threatening to become overwhelming. The equity in your home can be a good way to save you from this predicament and consolidate all your liabilities into one loan. Equity can be explained as the difference between the market value of your home and the unpaid mortgage balance. With a help of a professional, it can save the day and get you on the right track.

Managing finances is often troublesome when you have many different liabilities each month – credit cards, tuition and medical bills, car loans etc. It’s easy to miss the payment date or accidentally pay the incorrect amount. Properly utilizing home equity is a great way to leverage debt – it allows you to pay off all your bills with one payment, leaving you with one balance and one deadline. It’s much easier to manage one bill instead of many, plus a secured home loan generally comes with a much lower interest rate.

You have a couple of options once you decide to use home equity to pay your bills – Home equity line of credit (HELOC) or Home equity loan (HEL). With HELOC, once you have been approved for and granted a line of credit, it is possible to draw funds whenever you need money, (up to a predetermined limit). It can be accessed with a credit card, checkbook or a debit card. Typically, the interest rate is adjustable and lower than many other loans and types of credit lines. This option is best when you need to make paymenys over a time period, for example buying a car or paying tuition, or when you don’t want to have the whole amount but still have access to funds as you need them.

When you decide to go with a home equity loan, you are basically getting a second mortage using your home equity. This is the way to go when you need a lump sum of money, to pay for a second home, a vacation, or do home renovations, for instance. It’s a great opportunity to consolidate debts and have a fixed monthly payment that you pay off over a pre-determined time period, all this with a lower interest rate.

Refinancing your home to reduce monthly bills and payments can be referred to as good debt, because you save money with a lower interest rate and have less hassle with managing different loans. Apply for a Toronto home equity loan through Mortgage Medics and get your finances in order.