Debt Consolidation Mortgage Loans
Do you have a lot of unsecured debt (Student loans, medical bills, credit card debt)? Do you have a mortgage or a house? Then you're in luck! You're one of the many who can use your house to your advantage.
Advantages of Debt Consolidation Mortgage Loan
Debt consolidation mortgage loans allow you to borrow from the equity in your best investment (your house) to secure your unsecured debt. Doing so offers you many advantages. Here's how debt consolidation mortgage loans work:
- First, you find a company that offers debt consolidation mortgage loans, which should be easy because there are so many.
- Next, they go over your finances with you and you get a new mortgage that includes all the balances of your unsecured debts.
- Then, the debt consolidation mortgage loans specialist gets you the lowest possible rate.
- You make one monthly payment that covers your mortgage and unsecured debts.
Because the interest on a mortgage is tax-deductible, you may actually be able to write off some of the interest on your new loan. Of course, you would need to check with a tax advisor about doing this. Also, since the interest rate on unsecured debts is usually so high (anywhere from 18-24%) you benefit because now those debts are being paid at an interest rate as low as your mortgage. (The going rate for mortgages, on average now, is about 6%). Think of the savings that equates to!
Pitfalls of Debt Consolidation Mortgage Loans
When you get a debt consolidation mortgage, you're using your house as collateral. So if you can't afford the payments and miss some, you could lose your house. Then you'd be in debt and homeless! Eek! Obviously, if part of your unsecured debts are credit card debts, you'll want to stop using your credit cards. If you end up getting debt consolidation mortgage loans over and over again, eventually you probably won't be able to afford your payments any longer, and you will put your home at risk.
Other Options
If you don't own your own home, or if you have other collateral you can use, you may want to look into debt consolidation loans as an alternative. Or, if you don't have a home or any other collateral, maybe a basic debt consolidation program is the way to go. The only way to know for sure is to talk to a debt counselor, which is usually free of charge. And since there's no obligation either, what do you have to lose?
All material copyright © 2008 Debt Consolidation Help. All rights reserved.
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