Mortgage Debt Consolidation

Mortgage debt consolidation loans in the United States are becoming a more popular method to pay off obligations than ever before because of America's surmounting consumer debt. It is estimated that the average American household holds more than $18,000 in consumer obligations (not including mortgages). This equates to over 2 trillion dollars nationally. Americans live in a "buy now pay later" world. Mortgage debt consolidations can help those that have large credit balances. Using credit as a means of getting things that would not normally be afforded is not only socially acceptable, but encouraged.

Obtaining a mortgage debt consolidation to get rid of those obligations is one option. It would seem that indebtedness is inevitable if a person is not independently wealthy. It is a catch 22. In order to get a good education to get a good paying job, a student must take out student loans to pay for their higher education. Once the education is complete and the student retains a good job, the student loans must be paid back. While a 3%-6% interest rate sounds good in theory, for a $50000 student loan that has accrued interest for 4 years, equates to $125-$250 a month in interest alone. Add in the principle, and that graduating student not only has regular living expenses to pay for, but also a truckload of debt for 20 years.

The solution provided with a mortgage debt consolidation can only be an option for those that own their own homes and have some kind of equity in it. These mortgage debt consolidations are also named home equity loans, refinance mortgages, or second mortgages. The basic premise is to pledge property as security for payment of the loan. The loan proceeds are dispersed directly to the homeowner to spend as they wish. If the homeowner pays off all of their debt with the loan, then they can relieve the burden of multiple debtors wanting payment. This type of consolidation is becoming easier and easier to obtain, some even completely over the Internet.

"For wisdom is a defence, and money is a defence: but the excellency of knowledge is, that wisdom giveth life to them that have it." (Ecclesiastes 7:12). If the homeowner chooses to spend consolidation financing in another way, then they have the possibility of losing their home in the future. Banks and other lenders offer mortgage debt consolidation to those that are in need of it or not. The gain they receive is the promise to pay, or a portion of the homes value. This is considered collateral. Collateral is always required when an application is made for mortgage debt consolidations. These services should include some type of financial counseling, and this counseling can be the difference in an individual digging a deeper financial hole, or burying that hole without further burdens.

Add to: File Insurance Business article Teen Photo Images