519-646-2222Mortgaging unsecured debt is dangerous
Read on to find out why!
Once debt is secured you risk losing the asset(s) used as security if you have difficulty making payments.
Mortgage lending is based on a ratio of gross income and the total value of the property without regard to increasing taxes (that reduce available income) and without regard to the costs of selling the property, which can run up rapidly following a default.
Most high ratio lending is insured so the risk is reduced for the lender but not the borrower.
Second and third mortgages are almost always placed with higher interest rates than first mortgages.
Interest compounds over time and although the stated rate is lower than that of credit cards or lines of credit the interest can add significantly to the cost of borrowing.
Once you have consolidated into a mortgage you will most likely go right back to using credit cards and lines of credit.