Bad Credit Debt Consolidation Mortgage

There are many reasons that well-meaning people unintentionally end up with bad credit. Maybe you and your family had a number of unexpected medical bills that caused you to have to use your credit cards more frequently than usual. Maybe you lost your job and had to use your credit cards for necessities until you landed another one. Maybe you just made some bad decisions. Don’t feel too badly – you are not alone. Many people just like you are in the same predicament.

Whatever the reason, you have recently realized that for several months now, you’ve been having trouble paying your bills on time. You’ve only been able to pay the minimum amount due on all your cards, and the interest and finance charges are really beginning to mount up. You’ve really begun to worry about the stigma of having bad credit, and so you decide to ask your best friend for advice. He suggested that you file for bankruptcy, but you just aren’t sure that’s the right thing to do.

Another friend mentioned that a debt consolidation mortgage might be a good idea for your situation. You were curious as to exactly what a debt consolidation mortgage was, so you asked him to explain.

"You’ve been paying for your home and/or property for many years," he said. "And you have built up a good amount of equity in the process. A debt consolidation mortgage will let you use that equity to deal with all those credit card companies that you owe money to. Instead of having to keep up with the payment schedules for nine or ten cards, like you’ve been doing, you can use the mortgage to combine all your bills into one."

"But what about the interest rate?" you asked. "Wouldn’t it be huge with a big balance from that many credit cards? And the payment would have to be a mighty big one to pay down all those bills."

"Not at all," replied your friend. "Debt consolidation mortgages usually have pretty low interest rates. The payments are always small, too. I think it sounds like a good tool to help you get out of debt and build your credit rating back up before it gets too bad."

You were enthusiastic – it all sounded great to you! "Where do I go to find an application to do this?" you asked. Your friend went online and bookmarked several places for you to check out. "A word of warning," he said. "A debt consolidation mortgage will lengthen the time it will take for you to finish paying for your house. And, if something should happen to keep you from making the mortgage payment, you could possibly even lose your house. This mortgage can be a great tool to help anyone fix bad credit, but make sure you ask the lender at the agency you choose to explain everything to you so that you understand all the rules completely."

You take your friend’s advice. You do some research on the lenders offering debt consolidation mortgages, and after a meeting with the loan officer, you feel confident that you are making the right decision. You were offered an amazingly low interest rate, and a monthly payment of less than half of what you were paying on all your cards previously. The lender contacted all your creditors and made the arrangements for you, and now, you’re all set. No more collection agencies calling at odd hours! No more mailbox stuffed with past due notices and bills! Your credit report shows all your revolving card accounts as paid. You’ve simplified your life, too. Only one bill to pay each month!

Could a debt consolidation mortgage be the solution for you?