Consolidating debt into mortgage dating parent single teacher 20
With mortgage rates still near historic lows, consolidating credit card debt in a refinance can substantially lower monthly expenses. With their savings dwindling and credit card debt mounting, they looked to their most valuable assets: their center-city Philadelphia home and a second house they were renting out. Three years after Ray left an executive position, he found himself earning a fraction of his former income, while his self-employed wife, Jo Ann, struggled to make up the difference in a faltering economy.The question: Should you refinance your house with a mortgage to pay this debt off?Should you go further and refinance the entire loan into a lower interest rate, lowering your monthly payment and extracting money beyond what is needed to pay your debt?On the plus side, the house you bought for 0,000 10 years ago with a 30-year fixed-rate mortgage is now worth 5,000.
This is because consolidating high interest debt – like credit card balances and auto loans – into a low interest mortgage can save you thousands in interest payments.to pay it off outright, you may see your progress plateau after having children or any other big life change.In that case, consolidating high-interest debt into a lower-interest loan may be your best option."I would only suggest this as a last-gasp strategy," says Susan Reynolds, author of "One-Income Household." "In general, rolling credit card debt into mortgage loans is not a good idea. If you renege, they can pester you for payment and ding your credit report, but they cannot confiscate your home." Todd Huettner, president of Huettner Capital, a mortgage brokerage specializing in debt consolidation, advises homeowners to answer three questions before rolling debt into a home loan: After working with nearly 5,000 families, Susan White of Plan Plus Inc.You will pay significantly more in interest over the life of the homeowner's loan than you would if you chipped away at your credit card debt over a period of three to five years. has her own reasons for advising against rolling debt into home loans.
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High interest debt on credit cards, auto loans, or other consumer loans can be difficult to pay off and may create a barrier to your financial goals.