|Free Bad Credit Debt Consolidation Loan
Here we will explain how you can consolidate your debt, such as tour credit card, installment loan, student
loan and your car payment, into your current home mortgage so you can take advantage of low mortgage
interest rates compared to those of unsecured credit lines.
Good and Bad Credit Debt Consolidation Into
Your Current Home Mortgage
Consolidating your higher interest unsecured credit lines, into
your current home mortgage, is the most effective way to reduce
your monthly payments and lower the overall interest that you will
pay on your current debt.
Although there are many options on how to use your equity in
your home, such as a second Mortgage or home equity loan, we
will show you the steps to consolidate debt by refinancing your
To accomplish this, you will need to figure how much equity you
have in your current home. The more equity, in a percentage, the
more debt you can you can consolidate into that mortgage
payment. Even if you have little equity in your home you may still
qualify to refinance 110% of your house value. Although,
refinancing over your appraised value has it drawbacks. For one,
you will not be able to refinance again or even sell your home until
the balance is paid to or under the appraised value. Second, it
will come with a higher interest rate.
Depending on your credit score will determine how high your
interest rate will be and how much you will be able to consolidate.
Please seek your financial loan specialist for that information.
Next, you will need to take your mortgage, credit card, installment
loan, student loan, personal loan, or even your car loan and find
out your interest rate on each of these loans. Write them down on
a notebook as to my example below.
Loan APR Balance Payment
Car 4% $8,000 $300
Visa 14% $6,500 $200
Mastercard 12% $8,500 $250
Installment Loan 9% $5,000 $150
Student Loan 5% $2,500 $100
Mortgage 6% $85,000 $600
Now, take the equity amount of your home and write that down, so
we can have a target amount to work with as I will do in my
House Value: $100,000 Balance Remaining: $85,000
Equity I have: $15,000
Then, start with your high interest rate loans going to the smallest
and add them together. So in my example, I will take my Visa,
Mastercard and Installment loan. I will not include my car loan and
student loan because of the already low interest rate on them.
My total between these three is $20,000 and my monthly payment
on all three is $600.
I am over my current equity, but I will refinance up to 110%. To
see what I will save monthly I will use my loan calculator below.
For the example I will take a higher interest rate of 8% for my new
mortgage and add $3,000 on for tax and title fees. My new
mortgage loan will be for $108,000.
My new payment, at 30 years and 8% comes out at $792.47 a
month. I was paying $600 for my mortgage plus $600 for my
loans. This saves me over $400 a month.
In conclusion, you can see the benefit of consolidating debt into
my mortgage payment. For detailed advice including information
about a home equity loan and second mortgage please
consult a mortgage loan officer to further assist you on this.
|We hope that our free bad credit debt consolidation loan services will help you consolidate
debt, reduce debt, or even eliminate debt to get in a better financial situation.
This free bad credit debt consolidation services website is owned and operated by
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