Refinance mortgage loan debt consolidating
But sometimes the distinction between “good” and “bad” debt isn’t so clear-cut.
In fact, because of this generalization, some people make the decision to refinance their home mortgage in order to free up money to pay off credit cards.
In some cases these loans are small, closed-end unsecured loans that consolidate only a few small bills.
In other cases, these accounts can be large, revolving second mortgages or home equity lines of credit.
Essentially, you make a bet that you can pay back the debt – and you wager your house on it.
For example, if your house is worth 0,000 but you only owe 0,000 on your mortgage, you could potentially remove some of the equity in order to pay off debt with a higher interest rate attached to it than what you pay on your mortgage.
However, the opinions expressed here are ours alone and at no time has the editorial content been provided, reviewed, or approved by any issuer.
Everyone knows that credit card debt is “bad” debt due to the high interest rates on most consumer credit cards, while mortgage debt is often described as “good” debt.
However, if you don’t pay your mortgage, you lose your house. You typically need to pay for an appraisal and possibly a home inspection.
You also must pay loan origination fees and closing costs.