Debt consolidation is an option that many individuals turn to when credit card debt becomes too hard to handle. When bills start to pile up, life can become stressful due to many payments needing to be made at one time. With debt consolidation, all of your debt is combined, creating just one simple payment. This makes it easy to keep track of and helps you to lower the amount of money you are spending each month to eliminate your debt.
One way in which you can consolidate your debt is to apply for a loan. Financial institutions will offer debt consolidation loans to help you get rid of your financial burden. However, what do you do when you do not qualify with the bank for such a loan? There are options, including working with a mortgage broker.
What Can a Mortgage Broker Provide?
A mortgage broker is an individual who works with private lenders and financial institutions to offer a variety of services including those that help with debt consolidation. A broker can look at your personal financial situation and determine how you can receive help financially. Perhaps you have a home and could use the equity to pay towards the bills you have piling up? Refinancing your home can be one option to create one payment to your debtors.
An experienced mortgage broker can show you how the equity in your mortgage can be used to help manage your debt. This is a common practice to get you back on track financially. When you make your monthly mortgage payment, you are accumulating equity. Equity is a term that describes the amount of money that you have put towards paying off your mortgage loan.
For example, if you purchased a home for $300,000 in Cambridge and have made your monthly mortgage payment for many years now, you now owe $250,000. This means that you have at least $50,000 in equity. If you have made any changes or upgrades to the home, the value may be even more. Your home would need to be appraised to determine just how much equity you have in the home.
A broker can then help you find an equity loan to help you pay down your debt. This money can be used to pay off credit cards, lines of credit and car loans. Basically, a lender will be agreeing to absorb some of your debt back into the mortgage.
By using the equity in your home to consolidate your debt, you will be able to eliminate the high interest rate associated with your debt and enjoy a lower rate. You will be able to save money each month which will increase your flow of cash or you can use the money to further pay down your debt. Your financial situation will be in your control and you will no longer feel that you are drowning in debt.
Because every financial situation is different, you need to work with a broker team that will evaluate your particular needs. Work with Mortgage Guys to find the perfect solution for your debt, working to lower your monthly payments and secure you on the path to financial freedom.