Some of us are paying a fortune for high credit card debts. You might consider a debt consolidation mortgage refinance in order to help you save money, lower taxes, and get rid of you debts much quicker. When considering debt consolidation you usually have two choices: a home equity loan or a mortgage refinance loan. If you have really big debts than a mortgage refinance consolidation loan might be your best option.
It usually works best for those that have debt in excess of $50,000 or other debts that have a high interest rate.
If you meet this criteria than seriously consider a mortgage refinance.
Just like any other loan you will need to qualify first, but you can get a low interest rate if you have equity built into your home and your credit score is 700 or higher.An advantage of a debt consolidation mortgage refinance loan is that you can seek terms from 10-30 years and the interest on these types of loans is tax deductible. Because of the longer time frame the payments are stretched out over a long period of time making the monthly payments very affordable. If you have enough equity in your home you can also borrow additional money to do some home improvements around the house such as a bathroom or kitchen remodel, a new addition or something like that.
If you have debts in the $10-20,000 range, considered small, than a home equity loan might be the better choice for you.
With a home equity loan as compared to a debt consolidation mortgage refinance you will have a slight elevated interest rate but you will have practically no closing costs, and chances are you will get your money much faster. Let’s take a look at some of the advantages of getting a home equity loan rather than a mortgage refinance:
- The interest rates on home equity loan is usually lower than a credit car.
- When you transfer balances you normally will not pay any fees.
- The interest rate you pay on a home equity loan is tax deductible.
Borrow intelligently so that you don’t lose your house.
Whatever type of loan you choose make sure what you borrow you can truly afford to borrow and properly pay back. Keep in mind if you do not pay like you are supposed to you can lose your house.
To determine how much to get a loan for never get a loan for more than 80% of your present value of your home. That way you have some wiggle room should home prices suddenly drop and you have to sell you house on the open market. Only borrow if the interest rate on what your debts are is higher than the interest rate you would get on your home equity or debt consolidation mortgage refinance loan. It simply doesn’t make sense to get a home mortgage loan or home equity loan at 8% to pay a loan that is only at 5%.
If you do this intelligently a debt consolidation mortgage refinance loan or a home equity loan can help you realize saving in interest in the hundreds of dollars.
