Consolidating debt into home loan

This can be very attractive, particularly to those with sufficient home equity.

But before you sign on the dotted line of your new loan or refinancing agreement, make sure you know how debt reshuffling will affect your bottom line.

First, you may be able to get a lower interest rate on your consolidation loan than you were paying on your various other debts.

With interest rates on credit cards often ranging from 12-18 percent, that can produce a real savings.

Not all lenders will allow you to roll your old debts into your new mortgage.

If your bank agrees to let you use your mortgage to consolidate your debts, your loan must fall below a certain loan-to-value, or LTV, range.

Available consolidation loans often carry stringent qualification requirements.

That's particularly helpful if you can combine it with a lower interest rate as well. Basically, you borrow a single, lump sum of cash that's used to pay off all your other debts.By rolling your debt into a new home loan, you can consolidate your debts and lower your payments.Although they carry a clear benefit for borrowers, consolidation mortgages pose a higher risk for the lender and aren't easy to come by.If you’re looking to get out from under your student loan debt, it’s important to think through any strategy that lowers your monthly payments.This especially applies to the prospect of rolling your student loan debt into a mortgage.

Consolidating debt into home loan