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The burden of too much debt for homeowners

Andre Deleo of Morgix explains the problems with high debt and how to reduce it

Rising prices due to inflation along with rumours of an impending recession have made money management more difficult these days. A big issue that many Canadians are dealing with is high interest debt, which can make it very hard to get ahead financially.

According to Andre Deleo, President/Principal Broker at Morgix, there are some steps that you can take to help reduce overall debt and interest payments while improving your credit score.

The Importance of Reducing Debt Now Rather than Later

High debt, especially debt that is racking up high interest charges, is a problem in a number of ways. Of course, high debt on a high interest loan like a credit card costs a lot of money each month in interest charges.

The problems go beyond cost, though. Andre, who is passionate about helping clients restructure and fix their financial problems, says that too much debt can also negatively impact your credit score.

“Actively carrying less than 35% of your credit limits, month over month, as an active balance helps to optimize your credit score,” explains Andre. “Also, keeping your debt-to-income ratio low ensures that a mortgage renewal application is as strong as possible.”

Getting Out from Under High Interest Debt

There are a number of ways that you can improve your personal debt load and your credit score. “The first step is to consult with a professional. There may be ways that we can reduce your overall monthly expenses and interest rates by consolidating debt into a more productive loan,” says Andre.

He continues, “For example, it might make sense to combine high interest credit cards into a loan with a lower interest rate. For individuals that are having cash flow issues, a loan with an interest-only minimum payment might be a good idea. Our team at Morgix has experience with a wide range of situations and we help each of our clients to find a solution that is right for their unique situation.”

Some factors that may impact your loan options include your debt-to-income ratio, your credit score, your repayment history, and how much equity you have in your property.

Benefits of Debt Consolidation

Of course, reducing debt and saving money on interest charges is always an important goal of debt consolidation, but there can be additional benefits.

“On average, our clients improve their credit between 80 and 150 points year-over-year after doing a debt consolidation loan,” says Andre. “On top of that, average monthly minimum payment savings usually work out from anywhere between $500 and $1,500 per month.”

In the end, working with a professional premier brokerage like Morgix can help you to improve your credit score, save money on interest payments, and help you to pay off your debt more easily.

Andre and his team at Morgix offer homeowners a number of financial services including debt consolidation, refinancing, and credit repair. For more information contact MORGIX License #13399 online, email [email protected], or call 1-844-466-7449.