Wanna get rid of your line of credit? Learn how here!

Summary

Optimize Your Credit Strategy: James Loewen's Expert Tips for Restructuring Lines of Credit. Learn how to pay less interest and reduce your principal by reconfiguring your credit facilities. Discover cost-effective solutions without penalties or re-qualifications. Work smarter, not harder, towards financial freedom. Smarter, Not Harder.

Transcript

Hey guys. Welcome back. I'm James Lo-

Movie Clip : Pull over.

James Loewen: No, it's a zip up, but thanks for noticing. Jokes aside, the other thing I've been noticing a lot of lately is really a lot of balances on people's secured lines of credit. Now, I get it. It's easy to use, but like the front of your couch, it's dang hard to get rid of. Let's take a look at how we can restructure your total credit strategy so you're paying less interest to the bank as a whole and thus paying down more principal. I'm James Loewen. Let's get your total interest payment lowering. This is smarter, not harder.

Okay, let's break this down. What is the problem? Well, the problem I see too often right now is people have a whole bunch of money on a line of credit. How did you get there? Well, you probably had something like a home renovation where you're continually drawing money from that line of credit to get your home renovations completed. Now that your home renos are done, you've now just left the money on the line of credit.

What's the problem? Lines of credit now are based on prime plus 0.5. Prime now being 6.45 plus that half percent means you're paying 6.95%, and you're paying interest only and it's compounding monthly and it's never going to go away. Your minimum monthly payment means you will have that for perpetuity. Basically, you'll be buried with that line of credit statement.

So, what's the solution? You might be thinking, "James, I want to roll it into my mortgage, but I don't want to pay breakage fees or any penalties, and I'm just not sure if I re-qualify." The good news is, you probably don't have to. Within most credit facilities, things like the Manulife One, RBC Homeline Plan, Scotia STEP, what you can do is restructure within your credit facility. So if you have a line of credit, you can actually move the line of credit into another mortgage segment. Ta-da, at zero cost and zero re-qualifications.

Now, if we're taking a look at some terms right now, a three-year term is running somewhere around 5%. So even if you're paying interest only at 6.95 and now paying a mortgage at 5% that is amortized, your payment is going to be about the same. The big difference though, now you're paying down the principal, now you're optimizing your credit. Now you're going to actually get rid of that mortgage. Now you're working smarter, not harder.

All right guys, it's been a pleasure, and as always, I'm James Loewen. Now we got your credit restructuring, this is smarter, not harder. Thank you so much for staying tuned. As always, guys, thank you for the comments, the shares, and let us know any other videos or any other topics you'd like us to cover. Cheers.