Comments on: Consolidating Debt into a Mortgage http://gailvazoxlade.com/blog/archives/523 Thu, 09 Feb 2012 04:25:59 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Lisa http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-66445 Lisa Sat, 06 Aug 2011 16:20:22 +0000 http://gailvazoxlade.com/blog/?p=523#comment-66445 Hi Gail, My husband and I bought our house six months ago and we put no money down, with a mortgage rate of 5.75% When we moved into the house, we had my school debt (31,000 at 12% interest) his debt (5,200 at no interest). We have been paying it off every month, but we have recently been worrying about the possibility of him being laid off at work and our not being able to pay off our bills and our mortgage if this did happen. I am wondering if we should consolidate our loans with our mortgage in order to be safe in case something does happen? Because we pay 760 a month on my loan and 500 a month on his and we would be able to save more for an emergency and not have those costs if something did happen. We are not doing it to free up any extra money for spending, since I am getting a raise in September and we already work hard to stay on budget. Please help!:) Lisa Hi Gail,

My husband and I bought our house six months ago and we put no money down, with a mortgage rate of 5.75% When we moved into the house, we had my school debt (31,000 at 12% interest) his debt (5,200 at no interest). We have been paying it off every month, but we have recently been worrying about the possibility of him being laid off at work and our not being able to pay off our bills and our mortgage if this did happen. I am wondering if we should consolidate our loans with our mortgage in order to be safe in case something does happen? Because we pay 760 a month on my loan and 500 a month on his and we would be able to save more for an emergency and not have those costs if something did happen. We are not doing it to free up any extra money for spending, since I am getting a raise in September and we already work hard to stay on budget. Please help!:)

Lisa

]]> By: Angela http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-51528 Angela Fri, 27 Aug 2010 02:39:39 +0000 http://gailvazoxlade.com/blog/?p=523#comment-51528 Gail, just wandering if you could help us. We are currently home owners, have excellent credit, and have always paid off our debt. We want to purchase a vacation home down south. We currently have a credit debt of 50,000. That includes a truck that we bought, we were making the monthly payments on it, but later realised it would be cheaper to pay it off at the bank the loan was through, and put it on our credit line which has the lower interest rate. My question to you; Would it be a smart move to purchase the vacation home and put our debt on the mortgage, and keep making the same payments we are now? I should also let you know that the vacation home is a rental villa that is for sale. What the villa brings in for income, covers all the expenses to keep it running. Basically we pay the mortgage and insurance. Thank-you for your help, Angela and Marino Gail, just wandering if you could help us. We are currently home owners, have excellent credit, and have always paid off our debt. We want to purchase a vacation home down south. We currently have a credit debt of 50,000. That includes a truck that we bought, we were making the monthly payments on it, but later realised it would be cheaper to pay it off at the bank the loan was through, and put it on our credit line which has the lower interest rate. My question to you; Would it be a smart move to purchase the vacation home and put our debt on the mortgage, and keep making the same payments we are now? I should also let you know that the vacation home is a rental villa that is for sale. What the villa brings in for income, covers all the expenses to keep it running. Basically we pay the mortgage and insurance.

Thank-you for your help, Angela and Marino

]]> By: Heather http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-37795 Heather Sun, 13 Jun 2010 12:55:47 +0000 http://gailvazoxlade.com/blog/?p=523#comment-37795 In Nov/10 my mortgage is up for renewal. The balance will be $55,000 at that time(will be paid off by Nov/14). I have about $125,000 home equity. I have a line of credit balance of $12,000, credit card debt of $15,000. I've recently cut up my credit cards and am serious about paying down all of my debt by Nov/14. I am 52 yrs. old and am looking forward to retirement with as little debt as possible. My question is: should I consider consolidating all of my debt when I renew my mortgage this Nov/10? Also, 3 yrs ago I went through breast cancer. It was very early stage and very low risk of recurrence. If I do consolidate, will that affect my ability to continue the life insurance on my mortgage? In Nov/10 my mortgage is up for renewal. The balance will be $55,000 at that time(will be paid off by Nov/14). I have about $125,000 home equity. I have a line of credit balance of $12,000, credit card debt of $15,000. I’ve recently cut up my credit cards and am serious about paying down all of my debt by Nov/14. I am 52 yrs. old and am looking forward to retirement with as little debt as possible. My question is: should I consider consolidating all of my debt when I renew my mortgage this Nov/10? Also, 3 yrs ago I went through breast cancer. It was very early stage and very low risk of recurrence. If I do consolidate, will that affect my ability to continue the life insurance on my mortgage?

]]> By: Habika http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-35280 Habika Fri, 28 May 2010 04:28:17 +0000 http://gailvazoxlade.com/blog/?p=523#comment-35280 we have 2 young children and i need to find a place for my parents to move into because my mom is not going to be able to work much longer. am i nuts to want to do this instead of renting a house ======================== we have 2 young children and i need to find a place for my parents to move into because my mom is not going to be able to work much longer. am i nuts to want to do this instead of renting a house
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]]> By: Do Those Debt Consolidation Companies Really Work Or Are They A Scam? | How Do I Get Rid Of Debt http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-17431 Do Those Debt Consolidation Companies Really Work Or Are They A Scam? | How Do I Get Rid Of Debt Wed, 30 Sep 2009 11:51:18 +0000 http://gailvazoxlade.com/blog/?p=523#comment-17431 [...] Consolidating Debt into a Mortgage [...] [...] Consolidating Debt into a Mortgage [...]

]]> By: Finance, consolidating bad debt? | How Do I Get Rid Of Debt http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-16881 Finance, consolidating bad debt? | How Do I Get Rid Of Debt Wed, 16 Sep 2009 09:27:12 +0000 http://gailvazoxlade.com/blog/?p=523#comment-16881 [...] Consolidating Debt into a Mortgage [...] [...] Consolidating Debt into a Mortgage [...]

]]> By: Natalie http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-16681 Natalie Thu, 10 Sep 2009 01:41:42 +0000 http://gailvazoxlade.com/blog/?p=523#comment-16681 My husband and i are 50,000 in debt with credit cards/line of credit. we would like to buy a house and are thinking of finding an institution that will add the debt the mortgage it seems like forever to pay of the debt but at cc interest rates we are not paying them off. we have 2 young children and i need to find a place for my parents to move into because my mom is not going to be able to work much longer. am i nuts to want to do this instead of renting a house? My husband and i are 50,000 in debt with credit cards/line of credit. we would like to buy a house and are thinking of finding an institution that will add the debt the mortgage it seems like forever to pay of the debt but at cc interest rates we are not paying them off. we have 2 young children and i need to find a place for my parents to move into because my mom is not going to be able to work much longer. am i nuts to want to do this instead of renting a house?

]]> By: Renting versus Buying | The Money Saving Fifty (50) http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-16501 Renting versus Buying | The Money Saving Fifty (50) Fri, 04 Sep 2009 11:20:43 +0000 http://gailvazoxlade.com/blog/?p=523#comment-16501 [...] Consolidating Debt into a Mortgage « gailvazoxlade.com [...] [...] Consolidating Debt into a Mortgage « gailvazoxlade.com [...]

]]> By: Mortgage:choosing the Best Loan Program | MortgageRatesAholic http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-15875 Mortgage:choosing the Best Loan Program | MortgageRatesAholic Tue, 18 Aug 2009 22:39:35 +0000 http://gailvazoxlade.com/blog/?p=523#comment-15875 [...] Consolidating Debt into a Mortgage « gailvazoxlade.com [...] [...] Consolidating Debt into a Mortgage « gailvazoxlade.com [...]

]]> By: Yvonne http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-8951 Yvonne Fri, 10 Apr 2009 11:20:28 +0000 http://gailvazoxlade.com/blog/?p=523#comment-8951 Jane, rolling debt into your mortgage is not a bank "trap"...the trap is all the junk debt folks accumulate through credit cards and buy now pay later...then, when they can't juggle all those payments and/or are not geting anywhere on the debt because of the giant interest rates and they come to the bank for help that's when we will look at rolling it into their mortgage if the equity is there...the reason we suggest this is because 9 times out of 10 they won't qualify for the huge unsecured consol loan they need to pay off all that other non bank debt so their real estate equity is the only way to go...most folks don't have all this crazy debt because the bank gave it to them...it's the buy now pay later...it's the credit cards that are everywhere just waiting for you to grab them...it's the payday advance places etc...I've said it before and I wil say it again...get your credit from a bank!..sit in our office with us and we will go through your finances and advise you on whether more credit is even suitable for you....I do it everyday with clients..I give them a plan and alot of advice but only they can ensure that plan is executed.... Jane, rolling debt into your mortgage is not a bank “trap”…the trap is all the junk debt folks accumulate through credit cards and buy now pay later…then, when they can’t juggle all those payments and/or are not geting anywhere on the debt because of the giant interest rates and they come to the bank for help that’s when we will look at rolling it into their mortgage if the equity is there…the reason we suggest this is because 9 times out of 10 they won’t qualify for the huge unsecured consol loan they need to pay off all that other non bank debt so their real estate equity is the only way to go…most folks don’t have all this crazy debt because the bank gave it to them…it’s the buy now pay later…it’s the credit cards that are everywhere just waiting for you to grab them…it’s the payday advance places etc…I’ve said it before and I wil say it again…get your credit from a bank!..sit in our office with us and we will go through your finances and advise you on whether more credit is even suitable for you….I do it everyday with clients..I give them a plan and alot of advice but only they can ensure that plan is executed….

]]> By: Joanne http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-8916 Joanne Thu, 09 Apr 2009 21:28:13 +0000 http://gailvazoxlade.com/blog/?p=523#comment-8916 As for the HBP repayment. Shannon is correct - you can't skip a year and then make it up the following year. If you miss indicating it on your income taxes you will have to claim that money as an income (my self employed husband had it happen one year - but it worked out okay since he didn't have any income that year :o) ). But keep in mind - repaying more than your "required" amount doesn't actually help you. The money is going to the same place - your RRSP fund all the HBP is is the method in which you withdrew the money tax free. Therefore, say you put $5000 into your RRSP a year, and have a $500.00 payment due for HBP (home buyers plan). On your taxes you indicate 500.00 for HBP and you get to use $4500 as a tax credit. If you put more against your HBP - yes you are getting the total due down but you are not allowing yourself to use the full amount towards your taxes. The money still goes to the same place - it is just how it is put on paper for your taxes. The year I was on maternity leave with my twins (it spanned 2002 and 2003 work years) I had to ensure I had enough in my RRSP contributions to make sure that I had at least enough to indicate my HBP repayment. Because the HBP is a tax free loan to yourself you have to think of it not so much as a debt that needs to be repaid but more of how can I utilize this to my advantage (ie; tax benefits since we are typically in larger tax brackets right now). As for the HBP repayment. Shannon is correct – you can’t skip a year and then make it up the following year. If you miss indicating it on your income taxes you will have to claim that money as an income (my self employed husband had it happen one year – but it worked out okay since he didn’t have any income that year :o ) ). But keep in mind – repaying more than your “required” amount doesn’t actually help you. The money is going to the same place – your RRSP fund all the HBP is is the method in which you withdrew the money tax free. Therefore, say you put $5000 into your RRSP a year, and have a $500.00 payment due for HBP (home buyers plan). On your taxes you indicate 500.00 for HBP and you get to use $4500 as a tax credit. If you put more against your HBP – yes you are getting the total due down but you are not allowing yourself to use the full amount towards your taxes. The money still goes to the same place – it is just how it is put on paper for your taxes.
The year I was on maternity leave with my twins (it spanned 2002 and 2003 work years) I had to ensure I had enough in my RRSP contributions to make sure that I had at least enough to indicate my HBP repayment. Because the HBP is a tax free loan to yourself you have to think of it not so much as a debt that needs to be repaid but more of how can I utilize this to my advantage (ie; tax benefits since we are typically in larger tax brackets right now).

]]> By: Shannon http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-8910 Shannon Thu, 09 Apr 2009 20:06:55 +0000 http://gailvazoxlade.com/blog/?p=523#comment-8910 Tiffany, a few things about the RRSP First Time Homebuyer's Plan, you can not withdraw money that was deposited less then 90 days prior to your home purchase, so if you're taking out a loan and depositing the money into an RRSP, make sure that you do that more then 90 days in advance. Also, the max you can withdraw was just increased to $25,000 (per person, $50,000k per couple). With regards to repayment, you have 15 years to repay the money into your RRSP but remember that you must repay at least 1/15th each year - for example if you withdraw $15,000 you must repay at least $1,000 each year, you can't repay $500/year for 14 years and make up the balance in the final year. Tiffany, a few things about the RRSP First Time Homebuyer’s Plan, you can not withdraw money that was deposited less then 90 days prior to your home purchase, so if you’re taking out a loan and depositing the money into an RRSP, make sure that you do that more then 90 days in advance. Also, the max you can withdraw was just increased to $25,000 (per person, $50,000k per couple).

With regards to repayment, you have 15 years to repay the money into your RRSP but remember that you must repay at least 1/15th each year – for example if you withdraw $15,000 you must repay at least $1,000 each year, you can’t repay $500/year for 14 years and make up the balance in the final year.

]]> By: Andrea http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-8898 Andrea Thu, 09 Apr 2009 15:57:28 +0000 http://gailvazoxlade.com/blog/?p=523#comment-8898 Jane - I agree with you completely. I can see in dire circumstances adding other debt onto your mortgage, but some people seem to think that if they roll this loc debt into their mortgage they are now debt free. They still owe the same amount, just changed where they are owing it to and paying lower interest rates on it. Jane – I agree with you completely. I can see in dire circumstances adding other debt onto your mortgage, but some people seem to think that if they roll this loc debt into their mortgage they are now debt free. They still owe the same amount, just changed where they are owing it to and paying lower interest rates on it.

]]> By: Brenda http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-8897 Brenda Thu, 09 Apr 2009 15:44:21 +0000 http://gailvazoxlade.com/blog/?p=523#comment-8897 Jane - my parents NEVER had a mortgage, because my father saved his money and built his own house on property that he got from his father. Unfortunately, these days, that's not the case anymore, and prices have risen dramatically for everything. You should only consolidate your debts into your mortgage IF you promise not to run up the cards again, and to put extra effort into paying off the mortgage. If you can't do this, then no, you shouldn't consolidate. With credit card interests very high on some cards, it makes sense to go to a lower interest rate and really hammer away at it. Also, Jane, not everyone starts out getting a house and starting a family as young as they used to. Times have definitely changed. Jane – my parents NEVER had a mortgage, because my father saved his money and built his own house on property that he got from his father. Unfortunately, these days, that’s not the case anymore, and prices have risen dramatically for everything. You should only consolidate your debts into your mortgage IF you promise not to run up the cards again, and to put extra effort into paying off the mortgage. If you can’t do this, then no, you shouldn’t consolidate. With credit card interests very high on some cards, it makes sense to go to a lower interest rate and really hammer away at it. Also, Jane, not everyone starts out getting a house and starting a family as young as they used to. Times have definitely changed.

]]> By: Geoff http://gailvazoxlade.com/blog/archives/523/comment-page-1#comment-8893 Geoff Thu, 09 Apr 2009 14:53:27 +0000 http://gailvazoxlade.com/blog/?p=523#comment-8893 Here's where my history degree comes in handy - Canada comes from a tradition of non-revolution, as opposed to US revolution. In addition we are influenced by US capitalism which provides a balance to European inclination for protest/violents (ie protests of 1848 or the italian youth riots of a few weeks ago, the list is quite long). I am buying stocks, not canned goods, and think the economy will turn around quicker than people think it will (which is within my risk tolerences, I hope ;) Personally, I think protest that achieves goals peacefully is the only method of protest that is valid. Violence, riots, etc achieves nothing. It's also myopic to say that Canadians just accept whatever government does, ranging from failure of Constituational Accord up to the idea of Green Shift Idea by the Liberal party which got soundly voted on and rejected. I much prefer the Canadian approach to seeing cars on fire and our youth out of control. Don't fight the system, Change it from within. Empowerment is superior to fear and anger and that's what we should be focusing on. Rant over ;) Here’s where my history degree comes in handy – Canada comes from a tradition of non-revolution, as opposed to US revolution. In addition we are influenced by US capitalism which provides a balance to European inclination for protest/violents (ie protests of 1848 or the italian youth riots of a few weeks ago, the list is quite long). I am buying stocks, not canned goods, and think the economy will turn around quicker than people think it will (which is within my risk tolerences, I hope ;)

Personally, I think protest that achieves goals peacefully is the only method of protest that is valid. Violence, riots, etc achieves nothing. It’s also myopic to say that Canadians just accept whatever government does, ranging from failure of Constituational Accord up to the idea of Green Shift Idea by the Liberal party which got soundly voted on and rejected.

I much prefer the Canadian approach to seeing cars on fire and our youth out of control. Don’t fight the system, Change it from within. Empowerment is superior to fear and anger and that’s what we should be focusing on. Rant over ;)

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