What Is Debt
Consolidation?

Mortgage loans are used for a variety of purposes. While the main purpose is homebuying, these loans are often used to help consumers consolidate and eliminate debt. If you have equity in your home but find yourself with overwhelming credit card or consumer debt, you may benefit from mortgage consolidation or debt consolidation loans. This process can, however, be challenging since it requires full mortgage underwriting and verification by the debt consolidation issuer

Debt consolidation through home refinancing can have multiple benefits, depending on your circumstances. Reasons you may consider this include:

• It could help you manage a range of other short-term debt solutions that usually attract a higher interest rate. This could include existing credit card, store credit card or personal loan debt
• The ease of managing a single loan offers a regular repayment amount
• Unlocking equity at a lower rate could be a smarter way to fund renovations on your existing property

 

What are your Goals?

• Do you want to refinance to reduce your interest rate or pay off your loan faster?
• Are you looking to access the equity in your current property for renovating, to purchase an investment property or because you want to free up extra cash?

Mortgage interest rates are generally lower than interest rates charged on credit cards or personal loans so, by rolling these debts into your mortgage, you reduce your monthly payments. You should consider debt consolidation loans to refinance when you have high-rate credit card debt and a first or second mortgage above 4%. There’s a significant opportunity for you to lower your monthly payments and increase your savings.

In order for debt consolidation loans to work properly, you need to avoid accumulating additional debt again, as this could lead to serious financial problems including defaults or even bankruptcy. Debt consolidation through mortgage refinancing should be viewed as a one-time opportunity to regain financial stability and make responsible budgeting choices, not as a chance to restart the cycle of excessive debt. For most people, consolidating all their debts into their monthly mortgage payment can provide the second chance they need, allowing them to handle their current financial obligations and build a more secure financial future.

GLM Mortgage Group can help you understand the pros and cons of refinancing debt with a secure home loan. Now you can consolidate first and second mortgages and refinance your debts or take out a second mortgage to finance cash for credit card consolidation and reduce monthly payments. Our team will help you select the right debt consolidation option regardless of your credit score or poor credit history.

The benefit of using a mortgage broker is that we customize your mortgage for you personally and at no cost. Call GLM Mortgage Group for more information. We’re here to help.