A lot of us have mortgage payments, car payments, credit card payments, personal loan payments, insurance payments, utility bills and so on. These are the basic list of things we need to pay on monthly basis.
It seems like we can never free ourselves from these basic monthly payments. Or can we?
As a matter of fact, just by having HELOC (Home Equity Line of Credit), it can help us reduce the monthly payments by good amount and let us do more. Also, it will help us save quite a bit of interests as well.
Let’s look at the following example.
Let’s say we have $35,000 debts with a couple of credit cards and a personal loan.
Current Situation:
1. VISA: $10,000 @ 18.5% = Min. Monthly Payment of $155
2. Master: $15,000 @ 13.5% = Min. Monthly Payment of $169
3. Personal Loan: $10,000 @ 15% = Min. Monthly Payment of $125
4. Total: $35,000 @ 15.36% = $5,375 in interests for a year. Min. Monthly Payment of $449
After HELOC:
1. HELOC: $35,000 @ 5% (Dec. 2008) = Min. Monthly Payment of $145
2. Total: $35,000 @ 5% = $1,750 in interests for a year. Min. Monthly Payment of $145
Difference:
Total savings of $3,625 in interests for the year and $304 monthly payment amount.
This benefit probably is known to many of us, but there is more to HELOC with other possible savings.
By having this beautiful peace of mind fund(HELOC) available, you can do the following to reduce the monthly spending even further.
1. Switch to higher deductible insurance coverage for all of your insurance and hence lower your monthly obligations. As you know, if you go with higher deductibles on your auto insurance, you get savings on premiums. – You have HELOC to cover the higher deductibles IF something happens. By doing this, you can save up to 25%.
2. When you plan to spend big chunk of money on credit cards, purchase them first with credit cards that offer you some kind of Rewards like Airmiles, Travel Points and so on. Why? You know why!! You collect the points first and pay them off with HELOC to save on interests.
3. Move your entire mortgage to HELOC if you are a mover who does not tend to stay put long enough in one place. By having HELOC as your mortgage, you will have flexibility of moving to different places any time you want without any penalty. Worried about fluctuating rates? With TD Canada Trust’s unique HELOC program, you can even lock up some portions of your HELOC mortgage with Fixed rate option.
4. If there is any lower interests offer for balance transfer from your credit card company for a specific period of time (3 month, 6 month), utilize them by transferring your HELOC into theirs for whatever the promotional period is and then move them back to HELOC once the promotional offer expires!
Now, what is the requirements for HELOC?
Contact John Hahn from TD Canada Trust Mortgage team for more detailed information. Remember, you need a house first to tap into HELOC. 
John Hahn
TD Canada Trust Mortgage Manager
www.VancouverTDMortgage.com
