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Second Debt Consolidation Mortgage - When To Get A Second Mortgage
Writen by Ben Ehinger
Do you need to consolidate some of your unwanted and high interest debts? You can save a lot of money by consolidating your high interest debts into a second debt consolidation mortgage.
There are circumstances when a second mortgage to consolidate debt is a good idea and circumstances where it is a bad idea. The first thing you need to find out is if you can qualify for a refinance of your first mortgage. If you do, then you need to find out how much of your debt can be consolidated into your first mortgage before you worry about a second mortgage.
Your first mortgage will always carry a smaller interest rate so it will save you more money to consolidate your debt into it first. After you have refinanced your first mortgage, if you can, it is time to use the rest of your equity for a second mortgage, if necessary.
The only debts you want to consolidate with a second mortgage are judgments, collections, and very high interest credit cards. If you can eliminate some of these by consolidating them into a second mortgage, then you should. You will always have a higher rate on a second mortgage than on a first because there is more risk for the lender with a second mortgage.
Understand that if you are consolidating $25,000 worth of debt that has an interest rate of over 17% and you are able to get a rate of 12% or better on a second mortgage, then you are going to save a ton of money. This is a great way to cut your monthly payment on those debts and save money over the long term.
The best way to find out what you qualify for is to get an online comparison quote. This will give you an idea of what is out there and how good of a deal you can get. Always shop around and ask companies to match or beat rates and fees quoted to you by other companies.
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