For those who still have equity in your home and are thinking about consolidating dept here are some points to consider when paying off those credit cards and or fixed term loans such as a car loan or unsecured loan.  What ever you consolidate into the new loan is going to paid off in the loan term of the new loan, so if you had a car with 3 years left on the term and you refinanced to a new 30 year term that balance just got spread out over that same 30 years.  Now on the other hand your payment went down considerably and the the interest on the car payment that probably wasn’t tax deductible you might find yourself deducting it now with your mortgage interest deduction ( not accounting advise you need to talk to your accountant to determine how it would affect your tax situation).  Now when considering consolidating credit cards again there are points again to consider like the car the balance you consolidate into a new loan are again spread out over the term of the new loan.  Some big differences are that the fixed term on a loan being paid off is done paid in full, now with a credit you pay it off and you can use it again and again potentially running the balance up again with the unintended consequence of not helping but putting you even further in dept.  The only cure for this is SELF CONTROL, easy to say hard to do but if followed through  can put you back to the road to prosperity.  Another option of closing the account sounds good but can be bad for your credit score.  When you close a credit card account it hurts your credit score, a factor in determining the credit score is how much credit you have (credit limit) vs. how much credit you’ve used ( credit balance).  I’m not sure where the line falls some say when you get over 50 to 60% of used credit it can start to have a adverse impact on your score.  It’s hard to determine but it’s like this if you have credit cards that you have close to maxed out that’s not good and well hurt your score.  I think that if you can refinance out of a high interest rate to a lower rate you can’t lose, why pay 18%, 21%  or more in an interest rate when you can pay 5% .  I feel the goal should be to take some of the amount of money you would be saving because of the lower payment and start powering down on the saving account.  Here is a great tool for you to use to help determine how long it would take you to payoff a credit card CLICK HERE to go to this website.  For those of you who’s interest rate is over 21% it starts to get pretty scary on how long it would take you to payoff a credit card and the amount of interest you would the credit card company.

Now feel free to contact me if you would like an interest rate quote or CLICK HERE to go to my website and fill out a secure online loan application.  If you have more questions feel free to contact me and I’ll go over your situation to help you find the best solution for you goals.

Andrew Hahn Capital Advantage LLC a mortgage lending company

I am an independent mortgage broker with over 18 years experience in the mortgage industry.

This is not a website that’s a lead generating website that sells your information to other mortgage companies.