Choose a shorter debt consolidation mortgage loan

Choose a shorter debt consolidation mortgage loan

by Yanie Sulzerino

Choose a shorter debt consolidation mortgage loan

When in financial difficulties, one of the many loans one turns to for financial help is a debt consolidation mortgage loan. With this loan, it is possible to reduce interest rates and monthly payments to make it easier for you to pay off your debt. However though the debt consolidation mortgage loan is advantageous, it has its share of disadvantages too.

The main advantage with the debt consolidation mortgage loan is that it has a lower interest rate than credit card and unsecured loan rates. With the debt consolidation mortgage loan, you pay all your previous debts and end up with a single loan and a single monthly installment.

The interest of debt consolidation mortgage loan is tax deductible

The interest rate of the debt consolidation mortgage loan is usually lower than the other loan and credit card rates. So you save money by having to pay lower monthly payments, and find it possible to pay off your debt rapidly. Moreover, a debt consolidation mortgage loan will be for a longer term, which in turn leads to lower monthly installments.

Another advantage of the interest of the debt consolidation mortgage loan is that it is tax deductible while the credit card interest isn't. However student loan interest is tax deductible; so it is better not to consolidate it for a higher interest rate loan.

The disadvantage of a debt consolidation mortgage loan is that though your monthly installments are lower, you have to pay more in fees and interest. Origination fees for refinancing a debt consolidation mortgage loan can add to thousands while other home equity loans cost hundreds or nothing for opening.

Don't delay in making monthly payments

Delay in making your payments for the debt consolidation mortgage loan may lead to adding up of interest payments. This means that though you may have a longer term to repay the loan amount, in the long run, the monthly installments you pay for the term lead to an amount that is much higher than the monthly installments would have been for a loan of a higher interest rate.

If you decide to use a debt consolidation mortgage loan to repay all older loans and credit card balances, it is important that you shop around for loans with low rates and fees. This is to ensure that you save the most money through the loan. Basically, it is better to choose a debt consolidation mortgage loan of a shorter term from companies like www.vuemortgageloan.com to avoid paying large interest payments.