Consolidating credit card debt with mortgage
Even if your existing credit card have late payments, it’s most likely still going to benefit you to consolidate your debt into a refinance mortgage.
Recently the underwriting guidelines for bad credit mortgage programs have become stricter because of an increase in loan defaults and delinquencies. If you have had a past bankruptcy, foreclosure, repossession, or have been late on your mortgage payments, you still may qualify for a fixed rate second mortgage.
You can get a lowered interest rate card, but it will probably be for an introductory term of 6 months or a year.
The other area of concern is that the banks are allowed to change the terms at any time.
Homeowners have several advantages for consolidating credit cards with a debt consolidation mortgage or a home equity loan.
Borrowers have the ability to take out a second mortgage that enables them to refinance debt efficiently in a lower monthly payment that is tax deductible.
If you have three different credit cards with debts of, for example, ,000, ,000 and ,500, you’re likely to also have three different interest rates and to be making three different repayments at different times each month.
This can feel overwhelming and complicate managing your cash flow.
One option you have to consolidate your debts is to take out a single personal loan to pay off each credit card and any outstanding interest.Instead of just having to make minimum repayments as you do on credit cards, you’ll have to make set repayments that cover both the loan amount and interest, which you know will end at a certain date.You can choose to lock in your interest rate with a Fixed Rate Personal Loan, or enjoy the flexibility of making extra repayments and clearing your debt sooner with a Variable Rate Personal Loan.With a personal loan you’ll have just one repayment to make every week, fortnight or month over a set term – you can usually choose your own frequency of repayments.And if the interest rate on the personal loan is lower than your credit card rates – and they often can be – this can help you get ahead in reducing your overall debt.Turn Your Bad Credit Scores into Good Credit Scores- Many homeowners have circumstances arise that because their credit scores to suffer.If you own a home and have some equity in your home, chance are you can save a pretty penny, by getting a second mortgage to wipe your debt clean.The bottom line is that secured credit card debt consolidation reduces compounding interest and that will save you money each month.As you probably already know, banks issuing credit cards don’t offer the same interest rate.You can use a personal loan repayment calculator to work out exactly what your repayments will be.To summarise, the key advantages of consolidating your debt are: Taking out a personal loan can also help with your budgeting.