About Mortgage Debt Consolidation Loans
Consolidation loans are a popular way to get a handle on debt. You get the convenience of rolling all your debts monthly installment loans Ontario OH into a single monthly payment, which is often lower than what you were paying before, due to a lower interest rate, a longer repayment period or a combination of both.
A mortgage-based debt consolidation loan can be a good option for a number a reasons. First, mortgage rates tend to be lower than the interest rates than other types of debt, particularly credit cards and other unsecured loans. Second, mortgages can be repaid over a long period of time, which helps reduce your monthly payments. Third, interest paid on mortgage debt, even from a debt consolidation, is tax-deductible up to certain limits so that can save you money as well.
A Mortgage Debt Consolidation Loan can be one of two types: a home equity loan/line of credit, or a cash-out refinance.
Both types of loans have their advantages. A cash-out refinance allows you to consolidate all your debt into a single loan and usually offers the best mortgage rates and the longest repayment periods, up to 30 years.
Home equity is the difference between the value of your home and the remaining mortgage balance. Your home equity increases as you pay off your mortgage and as your home goes up in value.
You can use your home equity to get a loan or line of credit, which, like a debt consolidation mortgage, combines your debts into one payment.
For home equity loans, the lender uses your home as security. Interest rates on equity lines of credit are lower compared to other loans. You get a higher credit limit, which is useful on higher interest loans. On a home equity line of credit , you can get a maximum of 65% of your home’s appraised value. The more equity you have in your home, the more money you can borrow.
Generally, you pay interest on the money you use, not on your total credit limit. Continuer la lecture de Why Consolidate Debt Into A Home Equity Loan
