In many cases, home equity holds the keys to a successful debt consolidation.

Home equity is calculated by subtracting the outstanding balances of your existing mortgage(s) registered against your home from the current market value of your home.

With refinancing programs providing as high as 95% lending value against home equity, debt consolidation through mortgage refinancing is not only a viable option to consider, but the best option in most cases.

And if you’ve managed to maintain a solid credit rating despite having an excess of short term debt, the home equity loan options will increase with many programs providing highly competitive interest rates.

Even if your credit has been damaged by your overall debt position, there are still likely going to be options to consider for consolidating debt that are superior to anything else you may come across.

High ratio mortgages will likely require mortgage insurance which will be an added cost to you, but when you compare it to the high interest cost debt you may be getting rid of, the cost is extremely minor.

There are programs that will promote debt reduction through consumer proposals or even bankruptcy, but those strategies will destroy your credit and leave you in a poor borrowing position for years to come.

If you have the means to repay your debts over time, then the most effective strategy available on the market today is debt consolidation through mortgage refinancing.

Sometime home buyers don’t even realize this is an option to them due to the fact that they are not aware of how much their home may have gone up in value since it was purchased.  Combine that with the amount the mortgage has been paid down, and the resulting home equity available to secure incremental financing can be significant.

To get the most value out of this approach, its better to consolidate your debt sooner than later due to the fact that your credit is more likely to erode the longer a difficult to manage debt situation exists.  And every time your credit is reduced, the more it will be that your refinancing options are going to be more expensive.

While some homeowners are concerned about paying the refinanced debt back over a longer period of time, the reality is that most mortgage programs can allow for lump sum payments during the loan term, still allowing the borrower to retire the debt sooner if that opportunity presents itself.

The key with any debt consolidation is to work with an experienced mortgage broker that can help you select a program and terms that best fits your situation.

If you’d like to try and use your  home equity for debt consolidation or just want to know more about the process and your options, then I suggest you give me a call and we can work through everything together.

Click Here To Speak Directly With Debt Consolidation Specialist Joe Walsh

Technorati Tags: debt consolidation, Home equity, home equity loan, mortgage refinancing, refinancing debt, refinancing mortgage

Related posts:

1. Canadian Mortgage Refinancing