If you’re looking to buy a home, consider taking advantage of your mortgage by repositioning some of your existing debts that you currently have. Many people have consumer debt and the payments required surrounding those debts can often make it difficult to manage your daily finances. Considering a consolidation mortgage might be a fantastic option for you and your current financial situation.

Repositioning your debt or debt consolidation is when you combine several of your current debt accounts into a mortgage attached to your home. This is made possible when you borrow against your home’s equity. This can mean refinancing your existing mortgage, qualifying for a line of credit using your home equity, or possibly considering a second mortgage. Each of these options has its advantages which are best to be discussed with your mortgage expert.

Common Debts That Can Be Consolidated:

• Credit cards

• Unsecured lines of credit

• Vehicle loans

• Student Loans

• Personal or payday loans

Most debts in these situations carry high interest rates because the lenders don’t have any collateral that they can fall back on should you miss your payments. However, the mortgage is attached to your home; giving the lender collateral, which intern provides you with lower rates and better terms. Consolidating your debt makes sense for most people because it allows you to take high interest debts and reposition them into one single low interest payment which is much easier to manage.

When thinking about which will be the best mortgage for your situation, a low rate is definitely important, but your main goal should always be to lower the overall cost of borrowing. Having a mortgage with flexibility is advisable. This can allow you to increase your payments by 15%, double your payments or even make a lump sum payment of up to 15% per year.  Extra payments come right off the principle of the loan. So if you are consolidating your debts, you should take advantage of your pre-payment privileges by paying more than just your minimum payment and this will help you get out of debt faster as well as pay less interest saving you money.

There are a lot of variables to consider when it comes to consolidating your debt which makes it so important to talk with a mortgage expert about several aspects of this process.

If this sounds like something you would be interested in, the best place to start is to connect with us directly. Call us anytime, it would be a pleasure to speak with you about repositioning your debt and getting you into a more manageable financial position.