Consolidating debt into mortgage


27-Aug-2017 17:53

However, home equity loans for debt consolidation can be risky, as your home may be foreclosed on if you can’t pay your loan.“The danger is if you eat up a significant part of your home equity,” says Gerri Detweiler, education director of business credit website While unsecured debt consolidation loans can be easier to obtain and more convenient than secured debt consolidation loans, they generally have higher interest rates, so they are more expensive to pay down than a secured debt consolidation loan.Getting a debt consolidation loan is a major financial decision and one that shouldn’t be taken lightly.They use collateral, such as home equity used to secure a home equity loan, and generally have better interest rates than unsecured ones.If you have the collateral and can meet the requirements, a secured loan may save you money on interest as you pay down your debt.Once you know how much you can realistically allocate to paying down your debt each month, you can use the amount to determine terms for your loan.The amount you pay on your debt consolidation loan each month will vary depending on the amount you borrow and how many years you will take to repay it.

Compare your debt payment obligations and your spending to create a budget and determine how much you can realistically pay on your debt each month.For the length of the introductory period, you can make payments to reduce your balance without accruing interest. To avoid missed payments, penalties or default, you’ll need to create a budget that allows you to make payments on your debt consolidation loan.