Saved $13,000 Per Year Using Debt Consolidation

Before Consolidating his Debt

John’s home was worth around $700,000, and he had a mortgage with a balance of $275,000.

His mortgage payments were $700 per month. 

He also had a line of credit with a balance of $77,000 where some of it was used for a deposit on his new condo. The payments on this line of credit before consolidating were $384 pre month. On top of that, he had a car loan with monthly payments of $1,070.

The Solution: Debt Consolidation 

John decided to refinance his mortgage. 

This allowed him to combine all his debts into one, so he only had one payment each month. 

We increased his mortgage to $500,000, which was just 70% of his home’s value. 

By doing this, John could pay off his current mortgage, his line of credit, and the car loan all at once. This process is called debt consolidation, and it’s a smart way to lower monthly payments. 

The Costs of Debt Consolidation

Refinancing wasn’t free, but the costs were manageable. Here’s what John had to pay: 

• Mortgage penalty: $3,500 
• Legal fees: $1,250 
• Appraisal fee: $350 

After paying these costs and all his debts, John had around $25,587 left over for his future condo.

Before Debt Consolidation: 

Mortgage Payment: $1,400/month 

Car Loan Payment: $1,070/month 

Line of Credit Payment: $384/month 

Total Payment: $2,854/month 

After Debt Consolidation: 

New Mortgage Payment: $1,742.48/month 

By refinancing, John saved $1,111.52 each month! That’s over $13,000 a year. 

The Benefits of Debt Consolidation John’s story shows how refinancing your home can help: 

• Lower monthly payments 
• Combine multiple debts into one payment 
• Save money each month that you can use for other things