Credit Card Debt Consolidation Loans - Debt Consolidation Along With Home Mortgage Loan for A 125% Loan

Some people want to avail debt consolidation and at the same time capitalize the appreciation in the property. This strategy is about first consolidating the debt and then getting the debt consolidation loan through the equity of the house. It is like getting the home mortgage loan for getting rid of debt consolidation.

First Step – Debt consolidation:

All the unsecured debts, especially the credit card debts and the medical bills debts are consolidated. This is called unsecured debt consolidation. Private companies as well as the federal government offer debt consolidation services. When the debt consolidation services are offered by the federal government it is called federal direct loan consolidations. The debtor should try seeking debt consolidation quote from various debt consolidation service providers. Many debt consolidation service providers provide free debt consolidation services but not the debt consolidation loan.

Some of the major benefits of debt consolidation are reduction in total debt, a single debt substituting multiple debts, stopping of calls from creditors, reduction in monthly payment, reduction in the mental stress and finally a chance to improve the credit score.

Second Step- Combining the debt consolidation with the home loan:

This is like killing two birds with one stone. After availing the benefits of debt consolidation, the debt consolidation loans is availed through a home loan.

The benefits of this strategy are as follows:

• Because of debt consolidation, the total unsecured debt is supposed to be reduced.


• The rate of interest in home mortgage loan is usually lower than the rate of interest applicable on unsecured debt consolidation loan.


• The debtor gets the lowest possible monthly payment as well as the rate of interest


• Taking into consideration the appreciation of property, the lenders of the home loan can offer 125% of the current price of the property. With this much money, the debtor can get rid of the debt consolidation amount too.

There are lenders who also offer fixed rate home loans to get rid of the consolidated debt. When the rate of interest is variable, the debtor may at times need to pay more.