Using your homes equity for debt consolidation for most home owners, is a wise decision. Be sure when doing a debt consolidation loan that the monthly savings is significant and that you can comfortably pay the new mortgage.
It is important after completing a debt consolidation loan that you manage your debts so you don't incur significant credit card debt after your loan closes. Prior to closing your loan, examine what major purchases you may incur in the near future. You may be able to include additional proceeds in your loan to cover those costs as well.
You basically have a couple of options to do a credit card debt consolidation. The first option is to refinance your 1st mortgage and roll the credit card debt into your main mortgage. This will normally provide you with a lower rate and overall better financing terms. Another option you have is to take out a fixed rate second mortgage or to take out a home equity line of credit to use to consolidate your credit card debt. This option is usually cheaper but you will most likely incur a higher interest rate than with a first mortgage. Both ways of credit card debt consolidation can be very beneficial to most consumers and they can offer many other benefits besides just your initial monthly savings.
Credit card debt consolidation can reduce your overall monthly payments and boost cash flow, however it is important to utilize the excess cash flow wisely. After a credit card debt consolidation, open a high yield savings account and commit to investing a fixed percentage of your new monthly savings and pledge not to touch that money until the end of the year, when you can use it to make an additional mortgage payment which will go straight to the principal of your mortgage.
Antoher idea is to consolidate your non-mortgage debt in a new second mortgage, leaving the first mortgage alone. This would eliminate your revolving cred card debt and convert the interest payments into a tax deductable event.
Paying off those high interest credit card debt will definitely place you into a better financial position. Not only can it improve your credit score, it will greatly improve your monthly cash-flow that can be used to build and investment portfolio and increase your assets.
One of the best tactics to pay off your mortgage early is to do a debt consolidation refinance and eliminate all the high interest credit cards. After the debt consolidation refinance you should then apply the money that you would have normally sent to the credit card companies and apply it towards your mortgage. By doing this you will slash years off your mortgage loan.
Consolidating your credit card debt into your mortgage can be a wise decision. Interest on mortgage debt can be tax deductible while interest on credit cards or auto loans is not. Consolidation your credit card debt into your mortgage can lower your payments and reduce the amount of interest you pay.
When consolidating your credit card debt, you may want to consolidate credit cards that are close to being "maxed out" before you consolidate credit cards that have relatively low balances in comparison to the credit cards' limits. By doing this, you will have a greater chance of lowering your overall monthly payments and improving your credit scores.