The holiday season is full of joy and festivity, but it can also be full of something else: debt. In between gifts, food, and travel, the post-holiday bills can add up, meaning your clients could be in financial distress come January 1.
In December of 2016, according to Statistics Canada, Canadians spent $5.1 billion on food and beverages, $459.9 million on televisions and audio and video equipment, $417.8 million on toys, games, and hobby supplies, including electronic games, $274.9 million on computer hardware and software. All were increases from November of 2016 and up from December of 2015.
This past holiday season, experts predicted Canadian spending would increase even further — even as the Canadian household debt ratio rose to a record high in the third quarter of 2017. Total household debt in Canada hit $2.1 trillion at the end of September.
But what does this mean for you, the mortgage broker? If a client is struggling with post-holiday bills, or household debt in general, you can be the relief your client needs.
If your client is carrying a lot of high-interest credit card debt, you can help. Consider making them an offer to use home equity to consolidate those high-interest debts into one lower rate.
Advantages of rolling your client’s household debt and post-holiday bills into their mortgage can include:
· Lower fixed-interest rates: the amount of interest your client pays on a mortgage refinancing vs. monthly on a credit card (or multiple credit cards) could be significantly lower, even making any penalties associated with breaking the mortgage worth it in the long run.
· Single monthly payment: rather than having multiple holiday bills and payments to keep track of, consolidating your client’s debt into their mortgage means they would only have one payment to make, making their debt much more manageable.
· Improved credit score: Canada’s credit bureaus see payment in full as a good sign, so even if your client is still carrying the debt on their mortgage, the credit bureau would register the credit card payments as being fulfilled.
If your clients are struggling to pay post-holiday bills or other debt, you can offer them relief if they have equity available. You can also craft your messaging to attract new clients who may be in the market for a debt consolidation through mortgage refinancing.
Whether you’re validating your current clients’ home equity to help with post-holiday bills, or searching for new opportunities, Purview for Mortgage Brokers can help. Our tools and features can help you validate home equity and property value with the same information most lenders use.
Learn more by calling us today at 1.855.787.8439 or visit www.purviewforbrokers.ca.