If you own a home, and you have a lot of consumer debt, there may be a quick solution to help you fix your problem of having too much month left at the end of your money.  This solution is called a debt consolidation second mortgage.  By obtaining a debt consolidation second mortgage you can use the equity in your home to pay off all of your higher interest debt such as credit cards and vehicle loans.  You then have one single payment to make each month, and the balance will go down faster because it is at a lower interest rate.

What are the Advantages of a Debt Consolidation Mortgage? Debt consolidation can be a wonderful way to simplify your debt into one payment.  This allows you to save time, and money, each month by making one simple payment.    Debt consolidation mortgages will be at a much lower interest rate than the going rates on credit cards and vehicles.  This means that you can drop your 20%-31% debt down to lower than 10% interest.

Debt consolidation offers you much lower monthly payments than the minimum amount due on a bunch of smaller debts.  You can easily cut in half the amount you are paying out each month by consolidating your debt.

What are the Disadvantages of a Debt Consolidation Mortgage? The biggest disadvantage of a debt consolidation mortgage is that you are converting “unsecured” debt into debt which is “secured” by your home.  What this means is that if you do not make your payments on the debt consolidation mortgage, then the lender can foreclose on your house.    Another disadvantage is that while your monthly payments and interest will be lower with a debt consolidation mortgage, you will have your debt around for a much longer period of time, if you just simply pay the minimum due each month.     What Can I Use The Money from my Debt Consolidation Mortgage For? You might be surprised to learn just how easy acquiring a debt consolidation mortgage can be.  You might also be surprised to learn that you can basically use the money for just about anything you choose.  The loan is secured by the equity in your home, and this means the lender doesn’t really care too much what you use the cash for, they just want their payments.  And, they know they will receive their payments because if you do not pay on your loan then they will foreclose on your home! The most common uses for a debt consolidation mortgage however, is to pay-off high interest debts such as credit card debt, vehicle loans, personal, IRS liens, and private student loans.     If you are interested in obtaining a second mortgage to remodel your home, add a pool, pay for your children’s college education, etc… you can obtain a home equity loan and use it for any of these purposes, as well as many others.   
Whether or not a debt consolidation loan is right for you, is something that only you can decide.  However, you should always try to examine the spending patterns which landed your in debt and try to work on changing them so that you will not find yourself with a second mortgage and lots of new consumer debt as well.

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