Bad Debt Credit Consolidation Mortgage
Benefits of Refinancing Your Bad Debt - Consolidation Remortgage
Why would you want to take the most important purchase you ever made, your house, and refinance it to pay off bad debts? I guess the first thing we need to do is define what a bad debt is. A bad debt is a debt that takes you too long to pay off and costs you more than it should. A couple examples of bad debts are high interest (over 8%) credit cards, high interest loans (over 7.5%), and anything that is a judgment or a collection.
There are many benefits to refinancing your bad debt with a consolidation re mortgage or refinance loan. The benefits, in most cases, always outweigh the cost and in the long run you will end up in a better place financially.
Benefit #1 You will only have one payment a month
Having only one payment a month makes it a lot easier to manage your bills. Once you roll all your credit cards into your mortgage along with your other loans, you will only be left with one payment, your mortgage payment. This makes it very easy to manage your bills, as long as you dont go run up your credit cards or take out a bunch of new loans.
Benefit #2 You can save thousands of dollars over the course of your mortgage
If you have a credit card with a balance of $5,000 and a rate around 15% it will take you over 25 years to pay it off with the minimum payments. You will end up paying over $15,000 to pay off $5,000 of debt. This is why the credit card companies are so rich. Consolidate this into your mortgage and pay it off at a rate that is much lower and you will save thousands. Imagine if you have $25,000 - $50,000 in credit card debt, how much can you save?
Benefit #3 You can use the money you save to start an investment fund for your retirement
For example, if your loan specialist shows you how to save $300 a month, that is $3,600 a year. If you invest that over the course of 10 years you would have $36,000 plus interest and compound interest. You could easily end up with hundreds of thousands of dollars towards your retirement.
Any benefit you can come up with for refinancing and consolidating your debts is a good reason. You need to start by getting a couple of quotes and shopping around. This will give you a good idea of your options and you can weigh your options.
