Arguably, some have reported that the economy is improving. Some Canadian families have even started to use credit with confidence again. To all of you who are dipping back into your credit, you should heed the Bank of Canada Governor warning.
Recently several news agencies reported on statements made by Mark Carney (Bank of Canada Governor) where he warned Canadians that the Canadian economy may be growing again but Canadians will be feeling the negative economic impact of the global recession well into the future.
He also advised, in response to the recent report with respect to Canadians high utilization of consumer credit that “Without a significant change in behaviour, the proportion of households that would be susceptible to serious financial stress from an adverse shock will continue to grow.”
You see interest rates are only low because of the recent recession and record unemployment rates. Interest rates have nowhere else to go but up, they can’t stay at 0% or 1% forever. As the economy continues to improve rates will continue to rise, until they reach a point where economic stability is threatened.
The challenge is that those who are taking advantage of low interest rates now and utilizing credit may face a rude awakening when rates continue to rise. Especially those who own their homes because when their mortgages come due they could face higher interest rates and higher mortgage payments, this will make all of that new credit difficult to pay back, should rates go up.
The best plan, if you have credit card debt, is to stop using the cards and devise a plan to pay them down. Consider refinancing your home and consolidate your debt down to one low payment. If you are nervous about what’s been happening in the economy and with interest rates – consider locking in your new mortgage. For more information about mortgage interest rates visit www.gtamortgagematters.com.
Tuesday, December 21, 2010
Monday, December 13, 2010
How to Negotiate a Payment Plan with the Canada Revenue Agency (CRA)
If you owe money to the CRA do not take this lightly. The more time that passes the more the interest and penalties accumulate and the higher the likelihood that the CRA is going to come after you.
Sometimes time may pass and the CRA may not be aggressively pursuing you. This may give you a false sense of confidence that you have time and can negotiate with them. This is a dangerous assumption.
When the CRA decides that they want you to pay in full, they will be un-relentless in pursuing the money. They will even go as far as to freeze your bank account, garnish your wages or place a lien on your home. This is precisely the reason that time is of the essence and it is better to craft a plan to deal with your tax debt before it’s too late.
It’s always best to try to pay off the CRA in full (even if you don’t believe you owe the money) because then you won’t pay potential enforcement action. If you own your home, this is likely the best resource to use to pay off your tax debt.
If you owe a large tax debt, you may determine that refinancing your first mortgage is the best way to deal with the debt while others who owe less may reap greater benefit from using their home to obtain a home equity loan or home equity line of credit.
If you choose to try to negotiate a repayment plan with the CRA here is what you need to consider. Could you reasonably afford to repay the CRA in 24 months with their exorbitant interest rates? If the answer to this question is no, the CRA will not likely accept a repayment plan longer than 24 months and you will have to come up with a lump sum or payment in full if you plan on contacting them.
If you would like more information about how to negotiate a payment plan with the Canada Revenue Agency or how to raise the money to pay off your tax debt please visit www.gtamortgagematters.com.
Sometimes time may pass and the CRA may not be aggressively pursuing you. This may give you a false sense of confidence that you have time and can negotiate with them. This is a dangerous assumption.
When the CRA decides that they want you to pay in full, they will be un-relentless in pursuing the money. They will even go as far as to freeze your bank account, garnish your wages or place a lien on your home. This is precisely the reason that time is of the essence and it is better to craft a plan to deal with your tax debt before it’s too late.
It’s always best to try to pay off the CRA in full (even if you don’t believe you owe the money) because then you won’t pay potential enforcement action. If you own your home, this is likely the best resource to use to pay off your tax debt.
If you owe a large tax debt, you may determine that refinancing your first mortgage is the best way to deal with the debt while others who owe less may reap greater benefit from using their home to obtain a home equity loan or home equity line of credit.
If you choose to try to negotiate a repayment plan with the CRA here is what you need to consider. Could you reasonably afford to repay the CRA in 24 months with their exorbitant interest rates? If the answer to this question is no, the CRA will not likely accept a repayment plan longer than 24 months and you will have to come up with a lump sum or payment in full if you plan on contacting them.
If you would like more information about how to negotiate a payment plan with the Canada Revenue Agency or how to raise the money to pay off your tax debt please visit www.gtamortgagematters.com.
Tuesday, December 7, 2010
How To Consolidate Debt In Brampton and Lower Monthly Payments Over The Holidays
If you own a home in Brampton, you may have many financial options over the holidays to get rid of your credit card debt and bring in the New Year with one low monthly payment.
The problem with credit cards is that once you accumulate a lot of credit card debt, it is easy to get into a cycle of only making your minimum payments. This is scary because if you get into a cycle of only making minimum payments to high interest credit cards, they could take as long as 35 years to pay off.
The best thing to do is assess your debt load. If you divide your total debt by 6 you will arrive at the approximate number (not including interest payments) that you would have to pay monthly to pay off your debt within 6 months. If you can’t afford to pay off your debt in 6-12 months and you own a home in Brampton, Mississauga or anywhere else in the GTA, you should now explore your financial options.
If you have a low rate first mortgage and your debt load is less than $20,000, a home equity line of credit is a low rate, affordable and flexible credit product that you can use to consolidate you credit card debt and cut down your interest. Usually home equity lines of credit bear minimum payments equal to 1% or 1.5% of the balance. Just because the minimum payments are low doesn’t mean you should only make minimum payments. Given the payments you will have eliminated by consolidating, you should use this as an opportunity to double and triple up on your payments to your line of credit and in no time it will be paid off completely.
The same result can be achieved through a home equity loan. Those who have significant debt should consider refinancing their first mortgage and starting the New Year with one fresh new monthly payment.
Brampton homeowners can take advantage of the services of a Mississauga mortgage broker or Brampton mortgage broker to achieve financial goals where their homes are concerned. These professionals are seasoned in the Brampton real estate market and will ensure that you find out about the best available deals in your area.
For more information about consolidating debt in Brampton during the holiday season visit www.gtamortgagematters.com.
The problem with credit cards is that once you accumulate a lot of credit card debt, it is easy to get into a cycle of only making your minimum payments. This is scary because if you get into a cycle of only making minimum payments to high interest credit cards, they could take as long as 35 years to pay off.
The best thing to do is assess your debt load. If you divide your total debt by 6 you will arrive at the approximate number (not including interest payments) that you would have to pay monthly to pay off your debt within 6 months. If you can’t afford to pay off your debt in 6-12 months and you own a home in Brampton, Mississauga or anywhere else in the GTA, you should now explore your financial options.
If you have a low rate first mortgage and your debt load is less than $20,000, a home equity line of credit is a low rate, affordable and flexible credit product that you can use to consolidate you credit card debt and cut down your interest. Usually home equity lines of credit bear minimum payments equal to 1% or 1.5% of the balance. Just because the minimum payments are low doesn’t mean you should only make minimum payments. Given the payments you will have eliminated by consolidating, you should use this as an opportunity to double and triple up on your payments to your line of credit and in no time it will be paid off completely.
The same result can be achieved through a home equity loan. Those who have significant debt should consider refinancing their first mortgage and starting the New Year with one fresh new monthly payment.
Brampton homeowners can take advantage of the services of a Mississauga mortgage broker or Brampton mortgage broker to achieve financial goals where their homes are concerned. These professionals are seasoned in the Brampton real estate market and will ensure that you find out about the best available deals in your area.
For more information about consolidating debt in Brampton during the holiday season visit www.gtamortgagematters.com.
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