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Homeowner’s Guide to Defeating Debt

homeowner's guide to defeating debtKeeping your financial obligations under control can feel overwhelming at times. But as a homeowner, defeating debt may be easier than you realize. A few simple steps are all it takes to start managing your mortgage, personal loan, or credit card payments better – and prevent debt from dragging you down.

Why Managing Debt Can Help You Defeat It

Debt management not only plays a big role in protecting your finances, it can also improve your credit rating.

Why is that important?

Your personal payment history is responsible for about 35% of your total credit score. And any time you require new funding – like a second mortgage, for example – your bank will review your credit score to see how reliable you are about making your payments.

In other words, unlike many private lenders, institutional lenders focus on how successful you are at defeating debt by examining:

  • how often you make payments on time,
  • your track record for paying loans back in full, and
  • whether you’ve ever had payments in collections, or liens filed against you

Missing payments, making late payments, or taking out a new bank loan or HELOC can impact your credit rating over time.


Homeowner’s guide to defeating debt – some tips

That said, here are 3 quick and simple debt-defeating tips you can put into practice today:

1. Your Bills on Time

Meeting your payment obligations consistently is one of the easiest ways to eliminate late fees, avoid interest rate hikes, and manage your debt more effectively.

But while paying bills on time sounds simple enough, 2019 statistics show more than 1 in 10 Canadian households run late or miss their debt payments.

To avoid becoming one of those households, start by making a list of all your debt obligations, including:

  • the total amount you owe,
  • the monthly payment amount, and
  • when your payment is due

Then, make sure you never forget to pay your bills by setting digital calendar notifications on your smartphone, tablet, and laptop to alert you several days in advance.

2. Create an Emergency Fund

One common reason for taking out a new bank loan or home equity loan is a lack of savings in the face of unexpected expenses. It can be worth building an emergency fund to cover 3-6 months of living costs – even if you have to start small and gradually increase your savings.

Setting up a monthly automated bank transfer is a great way to put your savings on auto-pilot. And if you need help in the meantime, talk to us about turning your home equity into funding for your temporary needs.

3. Pay Off Your Credit Card Loans First

Defeating debt one loan at a time can be as straightforward as paying off your high interest credit cards first. This management strategy is based on simple math: the loan with the highest interest rate is typically the one costing you the most money. The sooner you can do away with those payments, the more cash you’ll have to pay down your other debts faster.

Remember, when it comes to defeating debt as a homeowner, you have options. A home equity loan from Alpine Credits can help you conquer everything from tax and credit card debt, to unexpected expenses like medical bills – regardless of your age, income, or credit history.

At Alpine Credits, Homeowners Get Approved.

Apply now or call (1-800-587-2161) to find out how you can subscribe for RESP through your home equity.