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Showing posts with the label high credit card interest
Is It Time To Refinance? When people take on a mortgage the majority opt for a 5 year one usually because they intend to stay in the residence and they know their payments for the next 5 years. However life sometimes throws a curveball at us and we have to make hard financial decisions. Perhaps an illness occurred or 1 person was laid off or a divorce occurs and suddenly you can't pay for anything in cash anymore and resort to using credit cards. As we well know credit cards companies love this because the amount of interest you are paying increases. Perhaps you took a 5 year mortgage out several years ago You now look at how you can lower your payments and because mortgage rates are at a historical low these days it makes sense to look at breaking your mortgage and taking on a new one at a lower rate.  Paying off credit cards at 20% + interest looks attractive when you can get a new mortgage under 4% these days. Before you do anything you need to know what it will cost to b

GOOD DEBT vs BAD DEBT

Not all debt is created equal – and not all debt is bad. In fact, you need some debt to establish a good credit rating. Being a responsible borrower means knowing which types of debt can help you reach your financial goals and which types leave you further behind. Good debt includes any investment or purchase that helps improve your overall financial position. Mortgage loans are considered good debt because they offer low rates on property that appreciates in value over the long term. You also build equity as you pay down your mortgage. Borrowing to invest is also considered good debt. Often, the interest expense on money borrowed for investments is tax deductible. And when borrowing to maximize your RRSP, you're investing in your future and benefiting from tax sheltered investment growth. Bad debt involves purchases where the value becomes lower than the original cost, and which can carry a high rate of interest, making them harder to pay off. Types of bad debt include high-