I have a second mortgage that has a 7.25 interest rate and wonder if consolidating it along with my credit card bills to get a lower fixed secure rat would be a good ideal and how can I do this?
ANSWER: If you have sufficient equity in your home to obtain a loan large enough to pay off both your second mortgage and your credit cards at an interest rate lower than 7.25 percent, you should certainly consider this option. Lowering you interest rate on your second mortgage could save you a significant amount of money over the life of the loan, and could save you even more money by paying off your high-interest credit cards with a lower interest mortgage loan. The first step in obtaining a refinance loan is to contact several lenders to compare the interest rates and loan terms they are offering you. By shopping around with several lenders, you can ensure that you are refinancing at the best interest rate and with best terms possible. If you enter your contact information at the Bills.com Savings Center, we can have several pre-screened mortgage brokers contact you to discuss the refinance options available to you.
There are several issues that you must consider before proceeding with a consolidation refinance loan. First, are there any prepayment penalties that you will incur on your second mortgage by refinancing? Second, consolidating your credit cards with a refinance loan may increase your monthly mortgage payments. While this increase will likely be offset by the fact that you will no longer have credit card payments to make, you need to make sure that you will be able to afford your new mortgage payment. By consolidating, you will be converting your unsecured credit card debt into secured mortgage debt, and if you cannot make your payments, the lender could foreclose on your home. Many people do not think about this fact when planning a consolidation loan and end up overextended and struggling to make their mortgage payments. However, consolidation loans work well for many consumers, so I encourage you to carefully weigh your options to determine if a refinance consolidation loan is a wise choice for your financial circumstances.
If you would like to learn more about refinance loans, I encourage you to visit the Bills.com Home Refinance Information page at http://www.bills.com/home-refinance/. I wish you the best of luck in finding a loan that meets your needs, and hope that the information I have provided helps you Find. Learn. Save.