As the market shows falling mortgage rates, statistics show that the possibilities for real savings has increased more by using a home equity mortgage as a debt consolidation tool.
Homeowners who have paid down a certain portion of their existing mortgage will have built up some equity against which they can easily get a debt consolidation loan. Be aware of the fact that your house will be kept as collateral against the loan. You should not miss your monthly payments to the debt consolidation company otherwise your house will come under risk.
Most of the people go for debt consolidation because they want to lower their monthly payments by getting a lower interest rate from the existing ones. The repayment plan can be simplified by putting all the multiple payments under one. Many people find it easy to stretch the payments over a longer period of time to ease the pressure on the monthly budget.
When you are getting lower interest rates by consolidating your debts under one payment plan, the mortgage industry has been going down and that’s why the rates are so interesting. Mortgage rates have fallen from 6.74% to 6.45% in the last year. The longer this trend continues, there will be more opportunities for savings by consolidating debts into a home equity mortgage. This can just be the cure for many Americans overwhelmed by their existing debt problems.
This entry was posted on Saturday, October 4th, 2008 at 6:00 pm and is filed under Debt, Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
I have several questions regarding your post. If I consolidate all of bills into one payment won’t that hurt my credit score? I have read that debt consolidation is one of the worst things you can do to your credit next to a foreclosure.
Second question. Do you think it would be better to refinance my current home loan versus trying to get a second mortgage (debt consolidation loan) if rates have gone down?
Thanks for all of the great information in your blog.