Using Mortgage Refinancing to Consolidate Debt

06.19.2012 | 12:00 am | Uncategorized

For consumers facing high levels of debt there are options available to reduce the debt, without resorting to bankruptcy. For homeowners that have developed equity in the home, or an increase value of the home compared to the amount of the balance outstanding for the mortgage, consumers can take advantage of consolidation loans using the mortgage.
These types of loans will allow the consumer to borrow to repay the credit cards and other types of debt that have been accumulated – and add the amount that has been borrowed to the already existing mortgage.
In order for the consumer to take advantage of the refinancing options to reduce the debt load customers are often required to have equity in the home. This way, when the mortgage increases the consumer is going to ensure that they are going to retain the value of the home without creating high amounts of negative equity in the home.
Contacting the lender or the mortgage broker to determine whether this option is available to you as a homeowner can be a great starting point. Consumers can reduce the debt while increasing the monthly payment made to the mortgage, but should consider the outcome and the new mortgage on the home.

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