Debt Consolidation Home Mortgage Loan

When faced with a lot of bills, debt consolidation can be a solution. By consolidating all the bills into one, it is often possible to lower the total monthly outlay while keeping everything up to date.

One way to get the money for such a consolidation is with a debt consolidation home mortgage loan. By using the equity in the house as collateral, these allow homeowners access to a large amount of money, which is then used to pay off the other bills. This leaves the mortgage as the only bill to pay.

There are several things to consider when thinking of the consolidation of debt via a home loan mortgage. The first aspect advisors would look at is the nature of the current debt. Credit cards are almost always unsecured loans, which makes it hard for creditors to seize assets to recover missed payments. Mortgages, of course, are secured by the home that’s been put up as collateral. This means that transferring the unsecured debt into secured debt puts the risk onto the debtor and off of the creditor. Only those who are absolutely sure they’ll be able to pay off such debts should consider this type of conversion.

For consolidating other secured debt, on the other hand, turning it into a single mortgage payment can be a good idea. If there are outstanding home improvement loans, car payments, or other such bills that are already of the secured variety, then using a debt consolidation home mortgage loan to pare their numbers is a fine idea.

Surprisingly, it’s quite easy to get started on consolidation of debt via a home loan mortgage. There are many sites online that allow people to enter their information to get quotes from qualified lenders. There are even sites that allow customers to start the application process itself online.

Due to today’s technology, the approval process is fast even for such large loans. This is because background work like accessing applicants’ credit history and checking home values in the area is computerized; allowing lenders to have instant access to much of the information they need. It is likely that they’ll still send someone out to see the home in question and do an appraisal, but this too can be scheduled within a short time.

Once the information is gathered, the lender will determine how large of a debt consolidation home mortgage loan it can offer, and at what rates. If the rate is such that accepting the loan will be a good move for the homeowner, the deal is finalized.

Once the mortgage is approved, what happens next depends on the lender. With some programs, the lender will then pay off the other debts using the proceeds from the loan. Other mortgage lenders will simply hand over a check.

After all the other bills are paid off, the homeowner will have only one bill – the mortgage payment. This should be easier for the borrower to both budget for and pay, making it a big first step in an overall goal of becoming debt-free.