Debt Consolidation Loan, Home Refinance Or Home Equity Loan? [mortgageapproved.blogspot.com]
James Parrott, Senior Advisor for the National Economic Council, answers your questions on President Obama's homeowner refinancing proposal that aims to make it easier for millions of homeowners around the country to refinance their mortgages and save hundreds of dollars each month. It will cut through the red tape will be good for families, good for communities, and good for the country at large. www.whitehouse.gov
mortgageapproved.blogspot.com Ask An Expert: Does it Matter Under The Refinancing Proposal if The Property is Underwater?
Others, with more home equity, are refinancing for the second or third time in a year, as rates have continued to tumble. "I'm talking to people who I thought, ... Low interest rates spur Bay Area mortgage refinancing
Debt consolidation is a way that you can take all of your high interest rate credit card debt, and bring it all under one low monthly loan payment. During the process you will also eliminate all of those high service charge fees you were paying every month, and you will be replacing them with one low monthly service charge. You will knock hundreds of dollars a month off your monthly budget, and you will create a cash flow that you may have never had before.
It all sounds great, but the next thing to consider is how you would go about creating such a great program. The financial world is full of products and plans that can help people move and consolidate money, many of these are loan products like a consolidation loan or a home equity loan. Understanding the differences between these ones, and how using one over the other can help your situation, is what makes a debt consolidation expert stand out among all the other financial professionals in the world.
A professional in this field understands the implications of using various financial products like equity loans, and can use their experience and knowledge to help you make the right decision.
A home equity loan may seem like a great way to take care of your rising monthly debt, but sometimes the terms on a home equity loan can cause the loan to be not such a great deal over time. A variable rate equity loan may wind up costing you more money per month than your credit card debt, and you also have to worry about paying off an equity loan within a set period of time which is usually much faster than a consolidation loan.But there are positive tax implications to an equity loan that may make it a better decision for you.
However, do not worry about it. All you need to do is to make an appointment to speak with a debt consolidation service representative. You will get a chance to weigh all of the properties of the various programs, and then you can make the right decision for you. Suggest Debt Consolidation Loan, Home Refinance Or Home Equity Loan? ArticlesQuestion by Sean J: Should I refinance Home Equity loan to consolidate credit card debt (I am buying a new house in 120 days)? Consider this: 1. I have $ 30k in credit card debt. 2. I have a 1st mortgage for $ 200k (4%) and a Home Equity line of $ 170k (at prime rate) with no additional credit available. 3. I am buying another house at the end of April. Would I be better off refinancing my Home Equity and Credit Cards into a new Home Equity loan, or just stick with it as is? I have heard that I may be able to get better rates on my loan for my new house if I refinance. Could this be true? Thoughts? Opinions? Alternatives? Best answer for Should I refinance Home Equity loan to consolidate credit card debt (I am buying a new house in 120 days)?:
Answer by HonestAnswers
Buying another home with a HELOC of $ 170K is a bit risky. If you are doing this for investment purposes, be sure you can cover your new mortgage / taxes / monthly maintenance. That said, consolidating your credit card debt is a good idea ONLY if you are willing to cut up all of your credit cards and never use them again. Learn to pay cash before you leverage yourself with debt through owning 2 homes, a HELOC, and credit cards.
Answer by LoanOfficer
You don't mention how much equity you have left in the home, but lets assume you have some equity. You would not want to "max out" your equity. Save at least 5-10% since you are going to be buying another home soon. Now if you have equity left to refinance your equity loan & pay down some credit cards, by all means do so. To best improve your credit score, pay off what you can, but at least reduce each credit card so that you have some available credit if any are at or nea r their limits. These are important factors in credit scoring and will get you a better rate on your new home. Its best not to close the cards that you pay off. Having that available credit will help your score. Close the cards after you secure your new home loan. Good luck!
