Why you should get a debt consolidation mortgage?

 Why you should get a debt consolidation mortgage?

If you are looking for a way to get out of debt, you may have heard of something called a debt consolidation mortgage. But exactly is a debt consolidation mortgage? Well it is simply a mortgage (usually a second mortgage or a refinanced mortgage) that uses your home equity to pay off your debt. Most lenders will allow you to borrow up to 80% of your home equity in order to do this, but there are a few who allow even a higher amount even up to 85% or even 90%.

 

Now you may be wondering, what is the point of this is. After all, don’t you still have the same amount of debt once you have consolidated it? The answer is, yes you do. But there are many good reasons to consider a debt consolidation mortgage if you are struggling with debt, let’s go over 4 great reasons why. 

 

  • You lower your interest payments.

 

Credit cards, payday loans, and even personal lines of credit can have fairly high-interest rates. When you pay them off with a debt consolidation mortgage, you almost always end up with a much lower interest rate. Not only does this help you to pay off your debt more quickly, but it might also even lower your monthly payments leaving you with more money at the end of each month!

 

  • One convenient payment.

 

If you have multiple credit card or debt payments, it can feel overwhelming and it can be easy to forget a payment. This hurts your credit score. With a debt consolidation mortgage, you only have to remember one lender and stay consistent with that monthly payment. 

 

  • Improve your credit score.

 

Having too much debt is not good for your credit score. By consolidating your debt and lowering your interest that you pay on that debt, you will be able to pay off your debt sooner and begin repairing your credit score. 

 

  • Lower your stress.

 

No question about it – debt is stressful! Perhaps you have racked up a lot of debt and don’t see how you will ever be able to pay it off. Getting a debt consolidation mortgage can help you pay off that debt years sooner. 

If you would like to learn more about debt consolidation mortgages and how one might be able to help you in your situation, contact me today for an appointment. 

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