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Debt Consolidation Mortgage Loans

Debt consolidation mortgage loans have advantages and disadvantages. Learn about debt consolidation mortgage loans before you decide if one is right for you.

Debt Consolidation Mortgage Loans

A lot of people are in debt these days. Some of it is due to medical bills, some of it is due to overspending and some of it is due to job loss. In any case, there are a lot of debt consolidation options out there (such as student loan debt consolidation, debt consolidation loans and debt consolidation mortgage loans). On this page, we will focus solely on debt consolidation mortgage loans.

The Upside of a Debt Consolidation Mortgage Loan

If you are a homeowner who's in debt, a debt consolidation mortgage can benefit you. It involves borrowing from the equity in your house to pay off unsecured debt, such as credit card bills and medical bills. Mortgage loan rates are usually much, much lower than credit card interest rates, so if you're just making the minimum monthly payment on your credit cards each month, it can take you 18-20 years to get it paid off! And some doctors are now charging high interest rates on outstanding balances as well. Since the interest rates on debt consolidation mortgage loans is usually the same as current mortgage rates, you can save a bundle of money over the long haul, if you know how to negotiate. Another plus is that in some cases, the interest on these loans is tax deductible. (Check with your tax advisor to see if this would apply to you.)

What to Be Careful Of

Whenever you get a mortgage or refinance your house, you might have to pay high fees or maybe even points. (Points can cost up to and sometimes more than $1,000 each!) However, with so many mortgage companies out there who offer debt consolidation mortgage loans and other types of mortgage loans, you'd be wise to shop around. You're bound to find one with minimal fees and no points. If you end up paying high fees and points, you aren't saving anything in the long run.

If your debt situation is due to a job loss, debt consolidation mortgage loans may not be the right option for you because your house is your collateral. Obviously, if you get a debt consolidation mortgage, your payment will go up. If you can't make the payments, you could lose your house.

Finally, if you pay off your credit cards with the a debt consolidation mortgage, don't run out and charge your cards up again. You'll already have a higher house payment from doing that before. If you do it again, you'll have high credit card bills and a high house payment, and eventually, something's gotta give. If you don't trust yourself to stop using your credit cards when you get a debt consolidation mortgage, maybe you should check into a little credit counseling to go with the loan. It can't hurt.

Finding a Debt Consolidation Mortgage

To find a debt consolidation mortgage, you've come to the right place. You can start by checking our Related Resources page for companies offering this service. But to get even more results, search the Internet using the term debt consolidation mortgage loans. You'll get pages and pages of companies to choose from.

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