Debt consolidation

In 2006, because of increased minimum monthly payment amounts by credit card companies, debt consolidation will become a solution to many American familiys' finances.

Debt consolidation often gives you tax advantages. Consult your CPA to discuss the tax benefits.

There are several ways you can use the equity in your home to consolidate your debts. You can do a cash out refinance and use the cash to payoff your high interest rate debt. At times your mortgage payment may not increase at all if you have had your current mortgage for a long period of time or if your interest rate is high and you are able to reduce it with the new loan. Another way to consolidate your debt is to do a home equity line of credit or second mortgage.

Many people really don't relize that putting all the oustanding debt in to one loan can save you hundreds of dallors a month. It also can be a tax deduction now since you can write off the interest you pay on your mortgage.

One of the big advantages of refinancing your mortgage for debt consolidation is that in most cases you convert non tax deductable consumer debt interest into deductable mortgage interest. For precise tax benefits however you will need to consult a tax professional.

Even though tapping into the unused portion of the equity of a property is a good means to restructuring a homeowner's debt, using the proceeds from a Debt Consolidation mortgage to pay off other debts effectively turns those unsecured debts into one single debt that is secured by the property. While creditors of unsecured debts cannot foreclose on the homeowner's property, a mortgagee can. Therefore, homeowners who are deep in debt and have a history of mismanaging their finances should consult a licensed financial planner before getting a Debt Consolidation loan.

New Credit Card Minimum Payments - Consumers who have just been paying minimum credit card payments should prepare for an increase. The new regulations for the Minimum Payments are starting to be felt by many consumers. If you are having trouble making your payments you may want to consider consolidating those debts by refinancing your home.

Under the pressure of ferderal regulators, banks are starting to announce that they are increasing minimum monthly payments on credit card balances. Obtaining a 2nd mortgage(HELOC, 2nd Trust Deed) can be a valid option to consolidate credit card debt and comes with the added benefit of deducting mortgage interest expenses.

Credit card debts just got harder to deal with. Since the new change in minimum monthly payments went into effect consumers across the board are feeling the pinch. This is one more reason to consolidate and reduce your monthly outgo. Stop paying such high interest rates and free up your cash.

The federal government had nothing but the best of intentions in mind when requiring these new credit card minimun monthly payments. Under the old Minimum Payment structure, many consumer credit cards with high balances would take 25 years or more to pay off by just making the Minimum Payment. The amount of interest that the card holder would pay in such a scenario would be astronomical. The one thing the government didn't fully consider is that making such larger monthly payments will prove very difficult, Cash Flow wise, for many Americans. If you find that making these higher credit card payments is creating Cash Flow difficulties for your household, speak with me to see if a debt consolidation refinance might make sense for you situation. What you want to avoid at all costs is falling behind on the credit card payments because once behind it becomes very difficult to get current. This will also lower your credit score making refinancing more difficult and expensive. You can see that it is always better to act before the situation gets out of control.

The average American household with one or more credit cards carries a balance of approx. $9500 dollars. An increase to the minimum monthly payment can impact one's budget severely. It is wise to seek advice from a mortgage professional if this is the case.

The way things stand now aren't a whole lot different then before. If you charge your credit card and make the Minimum Payments its just like taking a 20 year loan.

Why should I refinance? - Many homeowners are using the appreciation in there homes to get rid of high rate credit cards by consolidating. When you consolidate your loans you often reduce the amount of money your spending each month.

One of the main benefits to refinancing is to consolidate consumer debt. Consumer debt (i.e. Credit Cards & Auto Payment) is typically at a higher interest rate and is never tax deductible. Interest paid on debt tied to your home is deducted from your income at the end of the year often substantially reducing your tax liability. This tax favorable status is one of the many benefits of refinancing.

Refinancing your home can save you hundreds per month when you consoidate debt.

What if you want to add on, remodel or update the kitchen? You may not have the cash to do so, but the cost of improvements may be more than covered by the increase in value of the home. This is a great use for a home equity line of credit or a cash-out refinance.

Many people refinance to change from a variable rate to a fixed one or vice versa.
Refinancing a high interest rate after a 24 month good payment history could save you a lot of money on your monthly payment.

If planning to purchase investment property, refinancing your primary residence is a great way to raise the cash for the downpayment required.

Always consider your long term benefits of doing a refinance. The interest rate is not the most important aspect of the transaction. Even if your current rate is lower, you will probably save more money over time with a debt consolidation refinance then you would be with maintaining the situation you are currently in. Ask yourself a few questions:
How long have I had this balance on my cards?
At the rate I am paying my credit card debt down, how long will it actually take to pay them completely off?
What will be my total cost once I have paid off all my credit card debt?

Using equity in your home to pay off high rate loans (credit cards, auto loans, etc.) may have certain tax benefits also. Consult your CPA for more information.

To reduce the term or length of your loan, doing so can save you thousands of dollars in interest.

Bad Credit Mortgage Refinance - Hear what one borrower has to say about bad credit mortgage refinancing:

My significant other and I recently decided to refinance our house, and were unaware of the fact that we had bad credit until we sat down with our mortgage broker whom you can reach at the 800 number on this site, who ran a trimerge report and told us our credit scores were not so good. While it was hard for us to qualify for the excellent credit loan programs we had heard about, he told us not to worry. He suggested we look at options for bad credit mortgage refinance, and gave us a valuable education about our credit and how a bad credit mortgage can be your most powerful tool for credit repair and the cornerstone of financial well being.

There are several reasons you might have bad credit or subprime credit. The biggest cause of bad credit or poor credit for most people is making late payments to various lending institutions, or anyone who extends you credit, with a regular pattern. Seeing this, most lenders will assume that since you cannot or will not make regular payments to other creditors or lending institutions, you are probably not capable of making regular payments to them. The later you are with your payments, the more your creditors report you to the credit bureaus, and the further your credit score drops. Poor credit may also be caused by any type of bankruptcy. Whether you have used Chapeter 13 or Chapter 7 bankruptcy, most people use bankruptcy as a final option, and the record of this bankrupcty will entered on your credit report where it will remain for seven years. However even though it can indicate that you may be a very high risk borrower and make it impossible to get a loan from your local bank, the best brokers know how to help people even one day out bankruptcy get a loan and get back on the right track rebuilding credit. We had never filed for bankruptcy, but we did have very high balances and many derogatory tradelines, some which we incurred before we even owned our current home.

If you have bad credit, most lenders will not qualify you for a loan, but you should contact a mortgage broker on this site to review your credit report with you and determine whether they can help. The mortgage rates which they can get you with bad credit are better than most banks, but still will be higher than if you had good credit. But a bad credit loan is only the first loan in an overall credit rebuilding strategy. Step two is to make regular payments on the bad credit mortgage for 1 to 2 years, which will greatly improve your credit rating, and then refinance again with your broker who will now be able to offer you much better rates with your much better credit.

A bad credit refinance truly becomes a powerful tool for rebuilding credit for people who are interested in debt consolidation. When you refinance, even a bad credit mortgage refinance, you may be able to take extra cash out of your home equity to pay off the high interest credit card bills and high balances with other creditors that have caused your score to drop in the first place. And if you are anything like us, who had thousands of dollars to pay off on our credit cards, incorporating debt consolidation into your bad credit mortgage refinance will save you hundreds, even thousands of dollars each month. Even though we borrowed a little more money so our house payment went up a bit, our credit card bills got cut by 80% from before the mortgage refinance. We save over $1250 a month compared to before we refinanced if you look at what we totally have to spend, and for us thats meant the difference between TV dinners and steaks on Friday night.

While obtaining a bad credit refinance can often be more difficult, our broker made it easy, and it can help you to reestablish your line of credit after you have experienced credit problems. The bad credit refinance was our best solution to consolidating our debt and getting our total monthly expenses down to a more manageable level. With lower payments to all of our creditors because of debt consolidation, we dont have trouble paying on time, and are no longer living paycheck to paycheck. Our credit is already showing improvement, and this bad credit mortgage refinance has made the difference.

Lenders who specialize in assisting families get a home or refinance their home even with bad credit are sensitive to the borrower's needs. They realize that having a poor credit history show up is not something families are proud of, but that bad things happen to good people. Even in the direst of circumstances financially there are lenders that are willing and able to help correct the situation and help American families move on with their lives.

With so much competition in lending its hard to not qualify for a loan. Even with damaged credit you will find many programs to choose from. Speak with a broker about which program gives you the most advantages.

Mortgage Calculator - Many mortgage sites have mortgage calculators such as these:

• Rent Vs. Buy Calculator
• Mortgage Qualification Calculator
• Mortgage Payment Calculator
• Refinance Calculator
• Debt Consolidation Calculator
• Monthly Payment Calculator

It's always best to speak to a mortgage professional who understands what mortgage calculations meet your needs. Some mortgage professionals can perform a Total Cost Analysis.

Mortgage calculators can be used for wide variety of purposes. You can use the debt consolidation calculator to see how much money you would save if you were to consolidate your credit cards, car payment and other debts under one loan. The savings are usually substantial and can save you thousands over time.

Online Mortgage Calculator results should only serve as a general guideline. They offer simple calculations that ignores your other financial goals, such as your retirement plan and children's college fund. You should realistically scrutinize your budget and goals. A prudent homeowner would never let some online Loan Calculator make that type of financial decisions.

Taking the time to figure out a payment with an online mortage calculator is great! It allows you to see what the payment will be without the worry of a sales pitch. However there are sometimes things that go into a payment that you may not think of. Once you have a base payment to work with, make sure you contact your mortgage professional to confirm the numbers are accurate. Many calculators do not take into consideratin taxes, insurance, HOI payments etc.

Another common calculator is called the blended rate calculator. This is used when a borrower is getting two mortgages at once, usually a first mortgage to 80 per cent loan to value and a second mortgage for the remainder. The blended rate calculation lets the borrower know the cost of the money for the entire loan.

The debt consolidation calculator allows you to see your effective interest rate and savings in comparison to your current situation. This effective interest rate allows you to understand how refinancing may be much more in your favor despite possible rising interest rates.

Mortgage calculators can serve a simple purpose if you know what to use them for. Most calculators are designed to give you a payment based on very general basic information you enter into the program. The key piece of information you will need is the interest rate. If you are not approved for a loan and/or are not locked into a rate, anything you put in will just give you a payment based on the guess you entered. Consult with a mortgage professional, they will be able to give you a more accurate idea of what to expect for a mortgage payment, and they can cover other scenarios such as interest only which may not be an option on the calculator you use. Feel free to check the information the mortgage professional tells you with a mortgage calculator, you will need to know the loan amount, interest rate and term (or length) of the mortgage.