Mortgage rates were seen falling over the past couple of months. This sustained trend towards lower mortgage rates has increased the possibility to save more by using a home equity mortgage as an important debt consolidation tool.

Home owners who have already paid down a portion of their existing mortgage have built some home equity against which it will be easier for them to borrow some funds from creditors and pay other debts. Using your house as collateral for paying your existing debts will be a good financial decision, provided you are able to keep up with the payments and avoid raising your debt any further.

There are three basic reasons for consolidating debts into a home equity mortgage:

• The existing interest rates with your creditors will go down.

• The repayments can be simplified by putting all the debts into one source.

• Monthly payments can be stretched for a longer duration to make the monthly budget manageable.

Out of the three reasons above, the first is the most lucrative as it has the possibilities of saving money. The other two are legitimate tactics for managing debts only; there is no scope to save

Current Mortgage Trend

The intention of lowering down the interest rates on the debts has its effect behind the recent downward trend in the mortgage rates. The thirty year mortgage rates have fallen from a high of 6.74% to 6.45%. If this trend continues for a longer duration, there will be more opportunities to create real savings and by consolidating debts into a home equity mortgage.

This entry was posted on Monday, December 3rd, 2007 at 6:32 pm and is filed under Mortgage, Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.