Mortgage Lending Guide: Debt Consolidation Loans
Debt Consolidation Loans
When the interest rates and the minimum payments on all your obligations become overwhelming, it's probably time for a debt consolidation loan. You may be able to get an unsecured loan - but it may well carry a higher interest rate than you'd like.
If you receive low interest offers for your credit cards, it is very tempting to roll all of your smaller obligations into one at a low rate. But beware. If you are considering purchasing a house or refinancing in the near future, it could hurt your credit score.
Debt counselors abound on the web, but do read their documents carefully and even get references before you jump in. And unless you've gotten into such dire straits that you need someone to speak for you, don't pay for the service!
If you just want to clean up miscellaneous debt, consider taking a second mortgage on your current home. Yes, it will place a lien on your home, but if it will allow you to keep your head above water, pay all your bills on time, and still have a life - then it's worth exploring.
You may be tempted to refinance your home entirely to clear up this debt, but weigh all the factors before you do. If your credit has deteriorated recently, the new rate you qualify for might be higher than your old rate. It is much better to pay a higher rate on a small amount and have a second payment than to pay a higher rate on your entire home loan!
Do the math before you proceed. If you aren't sure how to make the comparisons, ask for help. Your Mouse House Mortgage Loan Advisor will help you examine all your choices and arrive at a solution that is best for you.
Mouse House Mortgage is a free service for people who are looking for a
mortgage loan with favorable rates, whether you have excellent credit or bad
credit. A friendly mortgage advisor will help you navigate your options and
access the best mortgage rates for your situation.
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