Debt Consolidation Mortgage Loans

Today, debt consolidation remains the number one reason people refinance or take equity out of their home using a second trust or home equity line of credit. Since property has appreciated in value significantly in almost every area, many people are deciding to use the "dead equity" this appreciation has given them to reduce or eliminate their monthly costs and reduce their total debt. Consider this, if you are carrying $20,000 in credit card debt, by paying the minimum payment of approximately $400, you will only reduce your balance by $10,000 in 20 years and you will have paid out  about $96,000! And to make matters even worse, you can not deduct a dime from your taxes. If you refinance your home at 8% you will pay only $146.75 more than your current house payment, and you can deduct the payment from your taxes reducing your real cost to about $105 per month. You have reduced your monthly expenses by nearly $300. Money you can use to keep you from ever getting back into debt. We offer many products to help you unlock the equity in your home or investment property to consolidate your debt. While there are an almost infinite number of debt consolidation mortgage loans available here are some of the most popular.

In a debt consolidation mortgage loan refinance, we determine the current balance of your mortgage, and the amount of debt you want to pay off plus any closing costs (remember, I do not charge origination fees so these costs are as low as possible). The total will be our new loan amount. Next, an appraiser will determine the value of your property which will be used to determine your Loan to Value (LTV). We have loan programs which will allow you to borrow 80,90, or even 100% of the value of the home in this "Cash Out Refinance" transaction. 

One  way to make a refinance work for you is to refinance for more than the balance remaining on your old mortgage -- in effect, tapping your home equity, or "cashing out," . Thanks to favorable rates, you may be able to do so without boosting your monthly outlay. For example, at 8.5%, the payment on a $200,000, 30-year fixed-rate mortgage is $1,538. But at 7.5%, that same payment lets you borrow nearly $20,000 more.

The best way to use the extra cash is to pay off any higher-rate loans you may have. Let's say that you are carrying a $15,000 car loan at 10% and are also making minimum payments on a $10,000 credit-card balance at 17%. Your monthly payments on those debts would total $680. Then assume you refinanced your mortgage, taking out an additional $25,000 to pay off your car and credit-card loans. Result: At 7.5%, your additional monthly mortgage payment would be only $175, so you would come out $505 ahead ($680-$175=$505).

Of course, all the extra cash needn't go for paying off debts. One recent client  swapped their ARM for a fixed-rate last December, they also increased their mortgage by $34,000, from $106,000 to $140,000. They used $2,000 of the proceeds to pay their refinancing costs and another $18,000 to pay off a 10% home-equity loan, which had been costing them $250 a month. They spent the remaining $14,000 to build a garage and did all this for just another $19 a month.                                    

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