Mortgage Loan Debt Consolidation Options

What is a mortgage loan debt consolidation and how serious does your situation have to be before you should consider it?

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How does debt consolidation for mortgage loans work?

If you transfer your current debts to your your (HELOC) home equity line of credit, you are effectively using your mortgage loan to consolidation your debts. These debts could be credit card, store card, charge card, overdraft, auto loan, and/or other debts.

What this means is that your home can be at risk should you not keep up with payments on this new loan. Therefore, it is strongly recommended that this should be a LAST LAST resort option. Yes, I said LAST twice for many reasons.

The worst that can happen if you fall behind with your unsecured debts is damage to your credit record. But there are more serious consequences once you move the borrowing to your new mortgage loan. Debts secured by your home could potentially lead to your home being foreclosed, if you miss your payments.

How serious should your situation be before you consider this option?

That's not an easy question to answer and every situation is different.

You're going to need professional financial advice to figure out whether moving other debts to your mortgage is going to be beneficial to you.

Mortgage loan debt consolidation is not a magic bullet.

Most of the time, in order to obatain a HELOC you have to have equity. By taking your expensive, short-term borrowing (credit cards etc.) and moving it to your cheaper, long-term borrowing (mortgage loan), you are potentially reducing your monthly payments now, but the amount of interest you pay in the long term will almost certainly be greater.

Where to begin? has created a series of articles on this subject.

See the links below for information to help you understand what your options are when considering a new home line of credit.

Home Improvement Debt Consolidation Loan

Consolidation of Debt and Home Improvement Loan Tips

Debt Consolidation With A Mortgage Loan

Consolidate Debt and Mortgage Refinance Information

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