Excessive debts cause a lot of worry and anxiety. Many people hope to
become debt free. However, earning enough money to care for daily living
expenses, while paying down credit card balances is challenging. There
are options available to those burdened with debt. Owning a home has
certain advantages. Debt consolidation mortgage loans are easy to qualify
for, and provide enough funds to payoff creditors.
Different Types of Debt Consolidation Mortgage Loans
If choosing to consolidate debts, homeowners usually obtain a lump sum
of money. The funds can be used to payoff credit card balances,
personal loans, auto loans, etc. Once credit account balances are zero,
homeowners simply submit one monthly payment to repay the debt consolidation
loan.
Because debt consolidation mortgage loans have very low interest rates,
most homeowners are able to repay the loan within a few years. Typical
repayment periods consist of five to fifteen years. Moreover, the
monthly payments are very affordable. You can expect to save hundreds each
month.
If opting to take advantage of a debt consolidation mortgage loan, you
may select a mortgage refinancing or home equity loan option.
How to Consolidate Debts with a Mortgage Refinancing
Cash-out mortgage refinancing is perfect for consolidating unnecessary
debts. Moreover, this method serves multiple purposes. Because of
falling mortgage interest rates, many homeowners are deciding to refinance
for a lower rate. In some instances, this may greatly reduce your
mortgage payment.
With a cash-out refinance, homeowners borrow from their homes equity,
and use the money to consolidate debts. Refinancing creates a new home
loan. Furthermore, if borrowing cash from your equity, the mortgage
principle will also increase. For example, if borrowing $25,000, the
mortgage amount owed will jump from $100,000 to $125,000.
Home Equity Line of Credit and Home Equity Loans
Another approach for using your homes equity to obtain cash for a debt
consolidation involves getting a home equity loan or line of credit. In
this case, loans are approved up to the amount of equity you have built
in the home. Because home equity loans are protected, homeowners with
less than perfect credit may also get approved.
Home equity loans are dispersed as a lump sum. This is ideal for paying
large credit card balances and other types of loans. With a line of
credit, homeowners are approved for a revolving credit account. Lines of
credit are also ideal for debt consolidation.
Carrie Reeder is the owner of http://www.abcloanguide.com. View her recommended sources for debt consolidation mortgage loans.
View her recommended debt consolidation mortgage loan lenders online. Also, view her recommended 125% home equity line of credit lenders online.
