Debt Consolidation Loans

Rolling High Interest Debt into Easy Payments

Debt consolidation involves acquiring one loan to pay off several debts. More often than not, the reason for this method of debt control is at least partially because a lower interest rate can be secured.

Debt consolidation can be accomplished by going from several unsecured debts to one bigger unsecured debt, but it usually incorporates a new, secured loan against a house or property. Since a house or other asset is being used as collateral, a lower interest rate can be secured.

Eliminate High Interest/Credit Card Debt

One of the most common debt consolidation scenarios would be somebody who owes a lot of money to several debtors, often including high-interest credit cards, who then takes out a loan against his mortgage to pay off the high-interest debt. The new loan is a type of equity loan, and it carries a much smaller interest rate.

The main benefits of consolidating debt in this fashion are:

In most cases a lower interest rate can be assumed

Eliminate multiple monthly payments due at different times to several different debtors

Wipe out credit card debt which can affect your credit rating, depending on your credit-used to credit-available ratio

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Home Buying Vocabulary

Fannie Mae

The Fannie Mae Foundation is the nation's largest foundation devoted to affordable housing.

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Frequently Asked Question

How will the interest rate affect my mortgage loan?

Answer:
The interest rate will determine several things, such as how much total money you can borrow, how high your mortgage payments will be, and it could even affect how long your loan term will be.

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