Hi welcome to today’s blog, my focus today is to discuss how your mortgage can set you free from other debts and build your net worth.

With everything that’s happened, the credit crunch, debt crisis, recession, historically low rates, everybody is trying to get their finances in order.  We have clients who wish to consolidate their debts but are not sure if increasing their mortgage is the best way to do it. This is a question that people struggle with all the time. We all wish to pay down our mortgage as quickly as possible.  But, these days, with people struggling to pay debts with high rates and no net worth or investments to their name, increasing one’s mortgage can be a smart move even if it takes longer to pay off.

In one case, it’s costing a client about $1000 per month to cover a $40,000 debt. We increased their mortgage to cover the loan and took some money from RRSP. We used the refund to pay down the additional money that we borrowed.  As a result, their monthly payment reduced to $300 and they now have better cash flow and RRSP investments that they didn’t have before.

Repositioning debt into one’s mortgage is a sound option for people who are committed to changing bad habits and/or taking a long-term approach to getting their finances in order.  When it comes to money we need to make sure we see the big picture, we need a long range plan and not a quick band-aid solution.

We call this strategy,  your Building Futures Plan.  I will talk about this further in the coming weeks to open up your mind and hopefully assist you in achieving a better Financial future for you and your family.