Mortgage Debt Consolidation and Cash out Refinance Options to Enjoy a Debt-free Status

Mortgage debt consolidation schemes are probably the best solutions when it comes to clearing off those high interest debts you may be having. Credit card debts are more likely to get consolidated first due to high interest rates and monthly payments. If you plan to perform a kind of cash-out refinance of the 1st or 2nd mortgage, you can easily consolidate your mortgage, as well as, the non-mortgage debts.

Mortgage debts include home equity loans and home equity line of credit. On the other hand, non-mortgage debts revolve around medical bills, credit card bills, auto loans, personal loans, other consolidation loans, and student loans.

Mortgage Debt Consolidation

Creating a mortgage based debt consolidation loan

When planning to create a mortgage debt consolidation loan, there are at least 4 popular techniques to consider. For the first mortgage, you can easily consolidate non-mortgage debts. You can also consolidate the 2nd mortgage into the first one. Also, there is an option to consolidate both the non-mortgage debts and the 2nd mortgage into your first. And then, there is also the option to consolidate your non-mortgaged debts with the 2nd mortgage.

However, you must keep in mind that defaulting on the mortgages result in foreclosure and losing your home property. There are certain pitfalls associated with mortgage debt consolidation schemes. You must read the reviews of top debt consolidation sites that deal with mortgage-based consolidation loans. This would allow you to understand every single term and condition of the scheme carefully before engaging in such a scheme.

Cash out refinance

Cash-out refinance is basically a typical kind of mortgage refinance method that could reduce your entire monthly payment amounts, change the loan terms, and alter the interest rates from variable to a fixed percentage. If you opt for cash-out refinance mortgage debt consolidation loan schemes, you would be refinancing your existing mortgage with a single large loan using home equity while keeping the cash difference.

Now, this cash that is left behind can be used for repaying the non-mortgage debts like, student loans, credit card loans, auto loans, medical bills, personal loans, and other consolidation loans. Now, you are left with repaying only a single loan to a single lender.

If you are opting for mortgage debt consolidation, a good way to utilize it is for the credit card debt relief purpose. In the last decade or so, a lot of people have taken the advantage of availing credit cards that come with no interest-based balance transfers and low introductory APRs. Once the introductory period gets over, the interest rates simply go high.

This is the trick most of the credit card agencies employ while offering the “introductory” schemes. Facing higher interest rates can make lives miserable for the account holders. The debts to repay may be too high to think about. To ease up the things, consolidation policies can be the best alternative available.

Be it the cash refinance schemes or mortgage-based debt consolidation options, you must ensure that a reliable credit counseling agency is handling your situation to avoid any future discrepancies.

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