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By taking out a debt consolidation loan secured by your mortgage, you can actually consolidate your high interest credit card debt. When you have equity in your home as security, you can get the lowest interest rates. You are even able to choose the words to suit your budget requirements. Hence you can shorten the payment time period to clear the loans faster or extend the period for lesser payments.
Taking stock of your debt and equity
Add up all your short-term loans and compare that amount to your equity before going for a cash-out refinance. Don’t forget that your equity isn’t what you paid for, it’s what your home’s value is based on. To determine the potential savings with refinancing, list the interest rates on your credit cards and current mortgages. When you have listed them, examine what type of debt consolidation loan would be best suited for your financial situation. A good option is to get a second mortgage to get a significantly lower rate. Getting a second mortgage also helps if you plan to move fast. If this isn’t the case for you, you can refinance your entire mortgage to get a lower interest rate.
Start Shopping Mortgage Loan
There are different rates and terms with which mortgage lenders package loans. You can take advantage of fixed interest rates or the security of a low-interest adjustable rate mortgage. You can even choose terms that will affect your monthly interest and payments.
Once you’ve figured out what type of mortgage you want, start shopping around to find a lender with a low APR. Both the interest rate and closing costs, which are often hidden costs of the loan, are included in the APR. Lines of credit and second mortgages often have lower closing rates than traditional refinance loans.
It is extremely important to compare multiple lenders before zeroing in on one. Search online so you can get a variety of them across your country.
loan processing
For a faster move, fill the loan application online. The completed paperwork will be mailed to you within a few days, for your signature. And in a few days you will get the loan.
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