American’s today are billions of dollars in credit card debt, and many of those people feel that there is no relief in sight. However, your mortgage could be the answer to getting out from under credit card debt quickly and easily. Taking advantage of your mortgage potential for debt consolidation can allow you to build better credit and have a lower overall payment each month.
Step 1- Take a Closer Look
If you are considering debt consolidation through your mortgage, you should begin by taking a closer look at the debt that you have along with the equity that you have built in your home. Your equity is based on your home�s assessed value, so you may have more equity than you think. Then look at the total of your short-term debt, like high interest credit cards, and compare interest rates and potential savings.
Step 2- Determine What's Best
Once you know how your debt and equity relate to one another, you can then determine what type of debt consolidation loan will work best for your financial situation. For instance, if you have a low rate mortgage loan, you may opt for a second mortgage. This option would also be good if you are planning to move soon, too. Yet if you are planning to stay in your home for a longer term or you have a higher interest rate on your current home, you can consider a mortgage refinance program where you can incorporate your short-term debt into your new mortgage.
Step 3- Shop Around
Once you know what type of debt consolidation you want to take advantage of, then you can start the process of shopping around for mortgage loans. There are a variety of mortgage loans available if you are interested in debt consolidation, and most terms vary by lender. This is why it is important to shop around, because as you look at the different companies you are more likely to find the right debt consolidation for you. Our service compares over 400 companies and is a free service to the consumer.
Step 4- Compare Rates
As you compare different mortgages for debt consolidation, you can opt for a variety of terms and rates. There are low interest adjustable rate mortgages or even fixed rate mortgages that may offer you more security, depending on your situation. There are also terms that have an impact on your monthly payment, so you will want to read over everything carefully.
Once you know the type of loan you want and the terms you desire, then you can also start looking for the lowest APR, or annual percentage rate. The APR includes interest rates and closing costs, and this is the figure that contains many of the hidden costs of your debt consolidation mortgage loan. However, if you are considering a second mortgage or home equity line of credit for debt consolidation, then you may find that your closing cost will be lower.
0 comments:
Post a Comment