Finance home re finance mortgage debt consolidating

"The theory of turning higher debt rates (credit cards) into lower ones (mortgage) is a great idea," says White in an e-mail, "but it usually doesn't work because many of the people who end up in this situation have a habit of spending without conscious decision making." Gayle and Jim Mc Weeney are determined to break that habit.

They refinanced their New Jersey home in July, rolling ,000 of credit card and car loan debt into their 30-year fixed-rate loan.

Either way, you're making one payment a month instead of several.

Ideally, you would also pay less interest and therefore pay off the debt faster." data-reactid="55"Debt consolidation means you're replacing many smaller debts with one larger one — for example, transferring all your credit card debt to one card or line of credit.

Remortgaging can also save you thousands of pounds, but it comes down to your personal circumstances."I would only suggest this as a last-gasp strategy," says Susan Reynolds, author of "One-Income Household." "In general, rolling credit card debt into mortgage loans is not a good idea. If you renege, they can pester you for payment and ding your credit report, but they cannot confiscate your home." Todd Huettner, president of Huettner Capital, a mortgage brokerage specializing in debt consolidation, advises homeowners to answer three questions before rolling debt into a home loan: After working with nearly 5,000 families, Susan White of Plan Plus Inc.You will pay significantly more in interest over the life of the homeowner's loan than you would if you chipped away at your credit card debt over a period of three to five years. has her own reasons for advising against rolling debt into home loans.“We recently had a client that came to us wanting to refinance their existing home loan, and they were looking to consolidate a credit card debt of ,500 and a car loan of ,000 at the same time,” Bartels says.“Initially, their friends had advised them to consolidate the debt directly into their home loan when refinancing, which would have meant they were financing this debt over 30 years.

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If you’re not sure which is best for you, read our guide to fixed rate and variable rate mortgages or see below for a brief overview of the main differences.

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