Debt Consolidation Mortgage Loans, What You Must Do First
Debt consolidation mortgage loans? There are other issues to consider before acting up on this. For instance, you might be able to get cash from your home. Owning a home that has an equity is like having a savings account. This you can use through a home equity loan.
Usually this is done to pay for your child's university or to make an improvement on your home. This could also be done to pay off a credit card balance that is costing you a high interest. This may be the way to go for whatever purpose you have in mind rather than the debt consolidation mortgage loans.
Why would this type of loan be better than keeping a credit card balance that charges a high interest? The difference between the two can be thousands of dollars. Why is this so? Well, the interest on the mortgage is lower and is tax deductible to boot. So it is a win-win scenario.
This is the reason most financial planners will advice to go on consolidation mortgage loans rather than keep the credit card. It can save one a lot of money to do this. That is why also that a credit card debt is considered as a bad debt compared to a mortgage obligation that is considered a good debt.
The smart money move when making large purchases is to use the home equity loan unless you will pay off the credit card as soon as the bill comes. Or use the credit card and then pay it off with the home equity loan as soon as the due date comes. Make sure you write the date on the calendar so you won't forget to pay it off. In this case you are able to take advantage of a free-interest loan for almost a month.
Consult with your tax advisor though. Decide on when to refinance your mortgage. Think of all the factors that you have to consider like the length of time you will residing in that home. Think also of which way the interest rates are going and of course your financial goals. You have to do what is right for you and your family.
There are so many choices but with enough perseverance and patience you will be able to make the wise choice. And keep asking questions. As for the refinancing choices, ask which way is right for you when you're ready to refinance. Learn as much as you can about the different options and how each one works.
Learning how the fixed-rate is different from an adjustable rate is sort of fun. And then compare these two with the home loans that you will be allowed to pay only the interest. When you refinance, make sure it is for a lower interest rate and a lower monthly payment. If the fixed-rate mortgage is good, lock it in so that your payments will stay the same.
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