|
Home >
Loans >
>
Article
|
When In Debt, Don't Look For Quick Fix
Staff - Mortgage Lenders Plus.com
|
Unless you’re one of those overachiever workaholic highly disciplined Type A types ( in which case you wouldn’t be reading this article) the odds are that you’ve hit the wall with credit on one or more occasions. In college, it meant cutting up the card and paying the bill down – which usually took about as long as Lent. As we get older, the debt problems get bigger and the solutions a little more elusive and often a lot more painful. For many homeowners with debt problems, the answer over the last five years has been home equity debt consolidation.
For those of us who have been fortunate enough to enjoy a substantial appreciation in home value, debt consolidation financing through a second mortgage has been a relatively painless answer. Of late, however, the notion of home equity debt consolidation has carried some risk with it. If you opt for home equity debt consolidation and refinance your home to take your home equity out in cash, you face the possibility of a flat housing market for some time to come. That means you’ll be paying down your debt – all your debt – at the interest rate established for your refi loan. That is probably a better interest rate than the short term rate on credit cards, but it also means a higher mortgage payment.
Nevertheless, home equity debt consolidation is a reasonable choice, provided you do so through a reliable and established home mortgage lender. Predatory lending is rampant these days, and the principal victims are people who have debt problems. Beware the carnivore in the silk tie that appears out of the blue to offer you solutions to your debt problems. In many cases, these deals result in people losing their homes because of unscrupulous debt consolidation financing contracts that they did not understand.
Select an established home mortgage lender – and the other requirement, considerably more difficult, is a change in lifestyle. It’s time to cut up the credit cards and go to a cash economy for a while. The most responsible way to pay off debt is slowly, over time. There are no quick fixes; the best possible solution is debt consolidation financing at a lower interest rate than your short term credit.
Opting for a home equity debt consolidation loan instead of a line of home equity credit is a good way to avoid further debt-inducing spending. Lines of credit can be deceptive: you may think it is part of your debt consolidation financing package because part of it went to pay off credit cards. But using the remaining credit available is an unnecessary temptation during a period when you are trying to reduce your indebtedness.
Credit counseling services have helped a lot of people. These services help you establish a workable budget that includes paying down your debt. In some cases, they will assist in negotiating a reduced debt load with credit card companies. Once again, however, a major change in lifestyle is in order. Whether debt consolidation financing is available to you or not, you’ve got to want it badly enough to make some important personal adjustments.
Related Articles:
2 Questions to Ask in the Bank Refinance Scenario
While the mortgage industry has seen the emergence of all sorts of new finance companies over the last fifteen years, banks have maintained their pre-eminent role in mortgage provision.
|
Adjustable Rate Mortgages Carry Substantial Risk
There are some exotic adjustable rate mortgage loans (ARMs) available these days that are capable of jumping fifty to eighty percent when the day comes for adjustment. Interest only adjustable mortgage rates can be frightening when they are...
|
Adjustable Rate Mortgages-Can I Control The Cost?
When adjustable rate mortgages (ARMs) were first introduced, the entire notion had great shock value for the naturally conservative banking industry. Who would want a thirty year loan with interest rates that couldn’t be predicted for twenty nine of
|
Banks And The Mortgage Frenzy
Now that the feeding frenzy in the housing market seems to have abated, the financial institutions that made it all possible are looking around and wondering what they hath wrought. Interest only home loans made it possible for millions of home...
|
Better To Cut Mortgage Or Invest In Funds?
Invest the money: Take the $500 and put it in the stock market. You can make more money there than you will save in paying down your home loan. This is a golden opportunity to dollar-cost average your way into the market and to build up a tidy...
|
Calculate your Refinance Savings for a Lower Rate
Mortgage Lenders Plus has a number of refinance calculators available for different refinance scenarios. It takes a calculator to make side-by-side loan comparisons, and it also often takes a calculator to compute the true cost of a loan.
|
Efficient Refinancing: Four Tools You’ll Need
The real estate market remains an enigma to the people who get paid for analyzing it. Clearly the rapid appreciation rate of homes has slowed, in some markets halted altogether, and in a few it’s gone into reverse.
|
Home Refinancing Can Create A Bind Down The Road
Americans are getting one more cash advance from their homes. Cash-out home loan refinances this spring hit their highest market-share percentage in 16 years:
|
How To Find The Best Subprime Loan
One of the commercial aspects of today’s microeconomics is the division in the financial industry between prime mortgages and subprime mortgage loans. A good part of the reason for these categories is the explosion of credit in this country and the e
|
If You Plan To Cut Spending: Refinance & Reduce
There's no question that refinancing your home will reduce your monthly payments and reduce your income taxes. But it may not help your financial situation one bit. In fact, it may cause considerable damage to your long-term financial well-being...
|
Investment Refinance is a Game for Financially Savvy Homeowners
A substantial number of homeowners will take out home equity loans or home equity lines of credit (HELOCs) because they can be construed as “cheap money.”
|
Its A Buyers Market Lower Home Costs And Lower Interest Rates
For those of you hoping to buy a house, here’s some news that fits in the “small miracles” category. Median home prices in the United States actually dropped in the last year. In August of 2005 that number was $229,000; in August of 2006 it was...
|
Land Refinance Can be Critical to the Survival of a Business Venture
Land refinance is a little different than obtaining a new mortgage on a home. Raw land is more difficult to appraise; often there have been no comparable sales in the area that can help to establish relative value.
|
Mortgage Settlement Costs Differ From State To State
An annual survey of mortgage closing costs in the fifty states brings up some substantial differences in its 2006 edition. The survey is partial to some extent, because it does not reflect taxes, other government costs or escrow fees.
|
Mortgage Shopping? There's No Comparison
The survey shows that the pricing of mortgage fees is a shell game, with different lenders calling the same fees different things. Some lenders charge a slew of separate little fees, and others charge a few bigger...
|
Paying Ahead – A Mortgage Boon Or A Deduction Loss?
For most homebuyers, just completing the purchase is a major financial stretch. Especially in the last five years, home buying has meant exotic financing schemes that allow the home buyer to maximize the purchase and minimize the...
|
Paying Off A Mortgage Isn’t Always A Good Idea
Homeowners who have held mortgages for many years and are financially sound often consider the option of mortgage payoff. People for whom retirement is near or who are trying to develop a financial strategy for their senior years face this...
|
Refinance Fees for a Home Equity Loan Are Similar to Mortgage Fees
Refinance fees depend on what sort of refinancing effort you’re considering.
|
Refinance Foreclosures are Result of Default on the Second Loan
For purposes of this article, we are going to assume that “refinance” refers to home equity refinancing in the form of a second mortgage. A home equity loan and a home equity line of credit (HELOC) are both considered second mortgages.
|
Refinance Lenders are Busy Turning out Home Equity Loans
|
Refinance Rates are Defying the Laws of Finance
Refinance rates can refer to a couple of categories of home refinancing. The first is a complete refinance of the mortgage(s) on the home into a new mortgage.
|
Refinance Tax Deductions is what makes Second Mortgages Valuable
When people talk about taxes and home refinancing, generally they are referring to the refinance tax break that may be available if you chose to refinance the equity in your home.
|
The Popularity Of Reverse Mortgages
Reverse mortgage loans have become a mainstream financial product over the last several years. Part of the reason for this is that the FHA and HUD are doing their best to develop a framework that protects seniors who want to utilize this tool...
|
The Pros And Cons Of A Reverse Mortgage
Any senior over the age of 62 who owns a home can seek out a reverse mortgage loan. These packages provide cash to the homeowner who, presumably, has accumulated a few decades’ worth of equity. The money can be provided as monthly stipends, in....
|
What Defines An Adjustable Mortgage Rate
Until a person goes shopping for a home loan, the most he or she usually knows about the business is that there are fixed rate loans and there are adjustable rate mortgage loans (ARMs) that typically start out with a low interest rate which at some..
|
|
