A young couple in their early 30s recently purchased their first home. With one partner on maternity leave and the other supporting the family on a single income, monthly expenses were high and debt began to accumulate. The couple wanted to lower their mortgage interest rate, consolidate debts, and create more financial breathing room as they transitioned to a single income in the short-term.
Debt is a common issue many face, especially when balancing new financial responsibilities such as a mortgage, childcare, and day-to-day expenses. In this situation, understanding the landscape of personal finance becomes crucial. For instance, the pressure of maintaining a household on a single income can lead to stress and anxiety, often making it more difficult to manage debt effectively. The couple’s story serves as a reminder of the importance of proactive financial planning and the potential benefits of debt consolidation as a strategy for recovery.
When life throws unexpected challenges your way, financial stability can feel out of reach. This client story shows how strategic debt consolidation—supported by MCAN’s SCORE Program—can help restore confidence, cash flow, and credit health.
Debt consolidation is not just about bringing multiple debts into one place; it’s about creating a financial strategy that works for your lifestyle. Implementing such strategies can provide much-needed financial freedom and lower interest rates, which in turn can lead to less stress and a more stable future. The couple took the initiative to seek advice and utilize available resources, which is a key step for anyone in a similar situation.
The qualifying Gross Debt Service (GDS) and Total Debt Service (TDS) ratios were 50.59% / 50.59%. These slightly elevated ratios reflect the financial pressures of a recent home purchase, maternity leave, and the transition to dual incomes. Despite these challenges, the clients secured approval—a true SCORE deal!
Clients maintained credit profiles, with scores of 675 and 689. While one partner had a minor derogatory mark from a missed payment years ago (quickly resolved), neither had a history of bankruptcy or major credit events. Their commitment to responsible financial management and prompt resolution of past issues positioned them well for credit rehabilitation and future growth.
The clients were approved for a $484,000 loan with a Loan-to-Value (LTV) ratio of 78.06%.
Despite recent transitions, both clients have stable employment. One partner is a full-time truck driver supervisor, earning $65,000 annually with nearly five years’ tenure at a reputable logistics company. The other is a full-time office administrator, earning $35,000 annually, currently on maternity leave but set to return to the same position and pay. Their combined annual income is $100,000, and future government benefits (CCB) will further support household cash flow.
Working with their mortgage broker, the couple refinanced their home to consolidate all outstanding debts and reduce their monthly expenses. The new mortgage provided:
With a responsible loan-to-value ratio and stable, verifiable income, the couple qualified for a three-year closed mortgage. The refinance not only consolidated their debts but also provided the flexibility to support their growing family and invest in their home’s future.
The impact of effective debt consolidation can ripple through every aspect of life. As the couple began to see their financial situation improve, they found themselves with more time and energy to focus on their family and personal goals. For example, they could now afford to save for their child’s education and plan vacations, which was previously out of reach. This shift not only enhanced their quality of life but also strengthened their relationship as they tackled financial challenges together.
Their story is a testament to how strategic refinancing can restore financial stability, improve monthly cash flow, and set the stage for credit recovery—even during major life transitions. It highlights the importance of working with a knowledgeable broker and lender who understand real-life challenges. Use our Broker Locator to find an accredited mortgage broker or agent.
In addition to the emotional benefits, debt consolidation can also have tangible financial advantages. For instance, by reducing monthly payments by more than $1200, the couple could allocate funds towards an emergency savings account. Having an emergency fund is essential for any family, as it provides a safety net when unexpected expenses arise, such as medical bills or car repairs.
Our SCORE Program (Support for Credit Optimization, Rehabilitation and Education) rewards clients who consolidate debt and continue improving their credit profile.
If their credit score improves by 30 or more over the first two full quarters of the term, we’ll pay $500 toward a mortgage payment. We’ll do the same if they maintain or improve further after another two full quarters.
And brokers who qualify for MQ Points payouts will 4x their MQ Points on SCORE deals!
Educational resources like financial literacy workshops and online courses can empower individuals and families to make informed decisions about their finances. Understanding credit scores, interest rates, and the long-term benefits of maintaining a healthy credit profile are critical to sustainable financial well-being. This knowledge can lead to better choices in the future, such as securing favourable loan terms and avoiding the pitfalls of high-interest debt.
Staying proactive about credit health is vital. Monitoring credit scores regularly can help identify potential issues before they escalate. Tools such as credit alerts and financial management apps make it easier for families to stay on top of their finances. By keeping an eye on their credit status, the couple can ensure they maintain their progress towards financial stability after the debt consolidation process.
As the couple continued to make payments on their new mortgage and managed their finances responsibly, they noticed improvements not only in their credit scores but also in their overall financial confidence. This newfound confidence encouraged them to explore additional financial products that could further enhance their stability, such as retirement accounts and investment opportunities, paving the way toward long-term wealth building.
