Consolidating debt with a new mortgage

18-May-2020 00:59

If you have a load of unsecured debt, such as high credit card balances, your top priority should be to reduce it as much as possible, as soon as you can.The longer you have the debt, the more unnecessary interest you pay.Thanks to an excellent credit rating and an appraisal valuing the house at 5,000 -- four times what they owed on it -- Ray and Jo Ann managed to lock in a 30-year fixed mortgage interest rate of 4.8 percent, two points lower than before.They're now saving

If you have a load of unsecured debt, such as high credit card balances, your top priority should be to reduce it as much as possible, as soon as you can.The longer you have the debt, the more unnecessary interest you pay.Thanks to an excellent credit rating and an appraisal valuing the house at $345,000 -- four times what they owed on it -- Ray and Jo Ann managed to lock in a 30-year fixed mortgage interest rate of 4.8 percent, two points lower than before.They're now saving $1,000 per month -- $350 less in mortgage, $650 less in credit card payments."I would only suggest this as a last-gasp strategy," says Susan Reynolds, author of "One-Income Household." "In general, rolling credit card debt into mortgage loans is not a good idea. If you renege, they can pester you for payment and ding your credit report, but they cannot confiscate your home." Todd Huettner, president of Huettner Capital, a mortgage brokerage specializing in debt consolidation, advises homeowners to answer three questions before rolling debt into a home loan: After working with nearly 5,000 families, Susan White of Plan Plus Inc.You will pay significantly more in interest over the life of the homeowner's loan than you would if you chipped away at your credit card debt over a period of three to five years. has her own reasons for advising against rolling debt into home loans.

||

If you have a load of unsecured debt, such as high credit card balances, your top priority should be to reduce it as much as possible, as soon as you can.

The longer you have the debt, the more unnecessary interest you pay.

Thanks to an excellent credit rating and an appraisal valuing the house at $345,000 -- four times what they owed on it -- Ray and Jo Ann managed to lock in a 30-year fixed mortgage interest rate of 4.8 percent, two points lower than before.

They're now saving $1,000 per month -- $350 less in mortgage, $650 less in credit card payments.

,000 per month -- 0 less in mortgage, 0 less in credit card payments."I would only suggest this as a last-gasp strategy," says Susan Reynolds, author of "One-Income Household." "In general, rolling credit card debt into mortgage loans is not a good idea. If you renege, they can pester you for payment and ding your credit report, but they cannot confiscate your home." Todd Huettner, president of Huettner Capital, a mortgage brokerage specializing in debt consolidation, advises homeowners to answer three questions before rolling debt into a home loan: After working with nearly 5,000 families, Susan White of Plan Plus Inc.You will pay significantly more in interest over the life of the homeowner's loan than you would if you chipped away at your credit card debt over a period of three to five years. has her own reasons for advising against rolling debt into home loans.

You may be able to use this equity to refinance your current mortgage and receive cash at a low interest rate to pay off your credit card debt.With mortgage interest rates at an all-time low, one option to help free up cash is to refinance your existing mortgage at a lower rate, reducing your monthly obligations.The money you save can be used to pay off other debt, such as credit cards, or set aside for an emergency.By rolling your debt into a new home loan, you can consolidate your debts and lower your payments.Although they carry a clear benefit for borrowers, consolidation mortgages pose a higher risk for the lender and aren't easy to come by.

You may be able to use this equity to refinance your current mortgage and receive cash at a low interest rate to pay off your credit card debt.With mortgage interest rates at an all-time low, one option to help free up cash is to refinance your existing mortgage at a lower rate, reducing your monthly obligations.The money you save can be used to pay off other debt, such as credit cards, or set aside for an emergency.By rolling your debt into a new home loan, you can consolidate your debts and lower your payments.Although they carry a clear benefit for borrowers, consolidation mortgages pose a higher risk for the lender and aren't easy to come by."The theory of turning higher debt rates (credit cards) into lower ones (mortgage) is a great idea," says White in an e-mail, "but it usually doesn't work because many of the people who end up in this situation have a habit of spending without conscious decision making." Gayle and Jim Mc Weeney are determined to break that habit.