Consolidating debt with a new purchase mortgage
Input the total debt you want to pay off or pay down across all accounts.
For example, if you want to pay off ,000 in credit card debt and a ,000 personal loan, input ,000. This is the total monthly debt payments for the loans you want to payoff. Please input your outstanding loan balance and not your original mortgage amount.
You could even improve your credit rating with a better payment record.
A home equity loan, or second mortgage, is secured by the value of your home, so the interest rate is usually much lower than a credit card. You can take advantage of lower monthly payments to pay off your debt more quickly or to save money.
If your new mortgage amount is too high relative to how much your home is worth you may exceed the lender’s limit.
If your property value is not high enough you may need to reduce your mortgage amount which likely lowers the amount of debt you can consolidate.
For example, if your current monthly debt expense is 0 and your mortgage payment is ,750 then your combined mortgage and debt payment is ,500. This is your new mortgage payment based on your interest rate, loan length and program.
In some cases your monthly payment increases with a debt consolidation refinance but your total debt payments should decrease. This is the amount of debt you pay off when you refinance based on your existing mortgage balance, new loan amount and closing costs.
With a home equity loan, you can often lower your monthly payments and spend less time paying bills.
This is the total amount of debt you want to consolidate.
This can include any type of debt such as credit cards as well as car, personal and student loans.
Home equity loans are available as fixed or adjustable-rate mortgages.
Borrowers pay an origination fee, which can be rolled into the loan, plus an appraisal fee and title insurance.