Mortgage and Debt Structuring

With interest rates at all time historical lows many would say having debt today is not a bad thing. If the interest rate on your debt is around 3% why would you take money from other investments earning more than 3% to pay off your debt at 3%? The local bank makes most of its revenue using the concept of arbitrage. Arbitrage is the practice of taking advantage of a price difference between two or more markets. Let’s look at this example. Say you deposit $100,000 at the bank, and the bank offers you ½ of 1% interest on that deposit. What does the bank do with your deposited amount?  They take that deposit and loan it out to their other customers in the form of loans at a higher rate. If they loan the money out at a say 4% but only give you 1%, the bank is making 3% on your deposit.  That’s called arbitrage.

The idea here is that you can potentially do the same. If you restructure debt that you’re paying higher interest rates on like your credit cards, student loans, other high interest loans, and restructure that debt to lower rates, that’s how you can create an arbitrage for yourself.  Not that I would suggest this but as an example, some people actually pull money out of their homes or businesses where they pay a very low rates so they can deploy that money into the stock market or other investments that are earning more than the interest they’re paying. I have friend whom decided on his own to pull $10,000,000 from one of his properties.  He now has a loan for $10,000,000 and pays 3% on that amount.  He has taken this $10,000,000 and invested it in the stock market.  I am not suggesting you do this but people do. Here’s another fun fact.  This friend of mine is a successful financial advisor!

Reorganizing your finances and paying attention to your debt at the current time could prove to be a big benefit for you.  Many times we are so busy putting our head down and being focused on whatever it might be while missing big opportunities. This is one area you do not want to overlook.

With years of experience dealing with mortgage and debt restructuring, together with our transparent and friendly approach to financial management, we are confident of identifying a debt restructuring solution that is right for you. Our aim to give you peace of mind by creating a mortgage and debt restructuring strategy that enables you to protect your financial future.