Debt Consolidation Mortgage Loans

What's the best thing about debt consolidation mortgage loans? The fact that you can refinance your house and your unsecured debts at a much lower interest rate? Or the fact that your unsecured debts get paid off all at once? Or the fact that you may be able to write some of the interest off on your taxes? Take your pick!

How Debt Consolidation Mortgage Loans Work

If you have a lot of debt and a house, debt consolidation mortgage loans could be the answer to your debt problems. Essentially, you're refinancing your house and getting enough cash to pay off those pesky unsecured debts at the same time. Imagine that you have a lot of credit card debt, and the interest rates range anywhere from 18-23%. And the interest rate on your mortgage is 7.5%. Then you get a debt consolidation mortgage and end up getting an interest rate as low as 5.75%. Think of how much money you've just saved yourself on interest! And as an added bonus, you may be able to write some of the interest off on your taxes. Of course, you'll want to check with a tax advisor about this first.

What to Be Careful of with Debt Consolidation Mortgages

Whenever you refinance your house, there's a chance you'll have to pay points or fees. Sometimes these can add up to a couple of thousand dollars. Most of the time you can negotiate these fees and points though, and there's so much competition in this industry for your business that it shouldn't be hard to do.

Also, you're going to have empty credit cards when you pay them off. Resist the temptation to charge them up again. If you do, you'll be right back where you started. You'll have a mortgage payment that might be higher than your previous one and high credit card minimums too. And people who miss payments on debt consolidation mortgage loans lose their house because that's the collateral for the loan. Of course, if you miss credit card payments, it will be reflected on your credit report.

Help for the Homeless

By homeless, we mean people who don't have a mortgage. If you don't have a house, but you have other collateral, debt consolidation loans might help you. Or if you don't have any collateral, why not check into a basic debt consolidation program? No loan is made, so no collateral is required.

Debt Consolidation Mortgage Resources

To find the best debt consolidation mortgage loans, check the companies on our Related Resources page. One of our favorites is http://www.low-home-mortgage-rates.com/. But search the Internet too. Comparison shopping is the only way you'll get the lowest rates!

All material copyright © 2008 How To Consolidate Debt. All rights reserved.

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