They say the more you earn the more you spend. And lately we have had clients with big paycheques but with big headaches over debt.
The Big Banks love BIG INCOMES. If you are making six figures or more, you are a target for your bank. Let’s face it, they have more money they can grab off your paycheque. Your bank has products they love to sell, mortgages, line of credit, visa and car loans. And you will pay as much as the bank feels you will tolerate. When all is said and done, you find that every cent you earn is going to make payments and it gets more difficult as the compounding interest escalates.
So goes the story for Tarah and Del from Guelph. They earn 150K per year but were finding their monthly obligations crippling. Last year, the tried to sell their home but the only offer they got would only pay off their 300K mortgage. So they struggled through another year with the debt continuing to mount.
The couple were paying $2,000 per month for a mortgage of 300K at 5.5% and other $1,500 per month in debt payments including their 50K line of credit which was maxed. Tarah was juggling the credit cards to keep afloat and when she called she was at her wits end. “I don’t think you can do anything, but I am really afraid we are going to lose our house if we don’t do something now. Tarah was embarrassed about her financial situation and she blamed herself for her family’s financial mess. We assured her that it wasn’t mismanagement of her affairs but more a case of no one looking after her family’s best interest. That’s where we come in.
We were able to refinance the Guelph couple’s home and pay off their 80K debt. Their payments are a comfortable $1,500 per month and with the 20% pre payment options they can use some of their monthly savings and pay their mortgage down. Tarah couldn’t be happier. “For once I feel we can finally get ahead,” she added.
DON CHERRY UPDATE: Don was spotted last week at The Goofie Newfie by David Meyer amongst others, who won a dinner for two and eligibility to win our Grand Prize, a one week summer vacation in Port Elgin to be drawn on Canada Day. Doug Kenny was the winner of Stone Creek’s dinner for two prize. Congrats to both. By the way, WE FOUND OUT WHO STOLE DON CHERRY and will let him know that it will be in his best interest to bring Don back by Friday, voluntarily.