Many homeowners carry a lot of extra debt in conjunction with their mortgage payment. Depending on the interest rate on credit cards, student loans or personal loans, a homeowner can often times save a lot of money by consolidating these debts into one monthly payment. There are many benefits to refinancing these debts into a mortgage.
Credit Card Debt Consolidation
Credit cards can take many years to pay off and a lot of extra money in interest. A homeowner can not only save money by combining these into their mortgage, but they will also then be able to claim the interest on their taxes. A person is not able to write off the interest that they pay on credit cards, student loans, car loans or personal loans as a deduction on their taxes. Once the homeowner refinances and consolidates the payments into their mortgage, they are then able to write that extra interest that they are paying off as a deduction on their yearly taxes. This can help the homeowner get a larger tax refund or keep them from owing more in taxes at the end of the year.
Extending Mortgage Payment Terms
Some people that refinance back into a 30 year mortgage don’t want to consolidate their other debts into their mortgage and take 30 years to pay it off. But, the homeowner should not just look at the negative part of it maybe taking a longer period to pay the other loan with mortgage refinance. A car loan that they originally took out for 4 or 5 years would be paid in that time, but the interest that they pay on that car loan is not tax deductible. A debt consolidation refinance is also a very good way for a homeowner to reduce their monthly bills. A person that has accumulated many debts or going through a divorce may not be able to afford their monthly mortgage payment and in jeopardy of losing their house. Consolidating their debts may help to reduce a lot of stress, save hundreds of dollars every month and allow a homeowner to keep their home.
A person that has been paying off their mortgage for 10 or more years may not want to refinance back into a 30 year mortgage, but still wants to combine their debts so that they are tax deductible. A great option for this homeowner would be to refinance into a 10 or 15 year mortgage so that they are not adding all of those years back onto their mortgage. Their monthly mortgage payment might go up some since they are not only increasing the balance with debts and shortening the term on their mortgage, but they will be able to pay off their mortgage in the same or shorter amount of time.
Home Equity Required
A debt consolidation refinance does require a homeowner to have the available equity in their home to be able to add in the debts to their mortgage. A homeowner also needs to have good credit, enough income and no late payments on their mortgage in order to qualify for the refinance. These things are necessary to take into consideration before a homeowner decides to start the refinance process and find out that they will not qualify.
To get approved for a Debt Consolidation Refinance you can use the Contact Form below to have a Utah Mortgage Professional contact you at your convenience. You can also complete the Mortgage Quick Application to get approved for your Debt Consolidation Mortgage and start down the path to saving immediately.
Mortgage Solutions TEAMat Christian Roberts Mortgage 512 E. Winchester Murray, Ut 84107 Ph 801.716.5246 Alt 801.716.5251 www.mymtgsolution.com firstname.lastname@example.org