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Using Your Mortgage to Consolidate Your Debt The Right Way

How to Use Your Mortgage to Consolidate Your Mortgage the Right Way


Debt consolidation, for some people, is looked at as a last resort. 

A tool that is only used if nothing else works and things start to get awful. However, this is not the case, and when done properly debt consolidations are the next best thing since sliced bread. 


So before we talk about whether you should consider one, let’s quickly show you the difference between the right and the wrong way to consolidate debt. 

The secret to making sure a Debt Consolidation is done right, is to approach the process as consolidation, and not as a way to reduce your monthly obligations/payments. That’s right, consolidate your debt, but also consolidate your payments so by the time you are done, your monthly payments are the same as they were before the consolidation.


By applying this principle DEBT stays the same, PAYMENT stays the same, we can take true advantage of the lower interest associated with mortgages and really get your credit cards, lines of credit, and car loans paid off faster and way cheaper. 

If you consolidate your debt, and then reduce your mortgage payment to the lowest possible payment by selecting a new 25 or 30-year amortization, you’re setting yourself up to pay way more interest than if you had just struggled to pay off your Car Loan or Line of Credit separately, even at higher rates.

I believe it’s the “pay off all your debt and lower your payment” mindset that has given Debt Consolidation a bad rap. This can be where families get into long-term trouble by just shifting the burden down the road. 

So as we work through whether debt consolidation is an option for you, just remember that we are going to do it right. We are going to help you pay off your debt faster. All your debt, not just your mortgage.

What you need to prepare for a debt consolidation review:

  1. The exact outstanding balance of your mortgage, including any potential penalties to break your contract.
  2. Statements from all your existing liabilities.
  3. A no-cost 30-45 min meeting with me to review your current situation.

 What if I am struggling to pay my current debt obligations? 

I hate contradicting myself but some adjustments to your payments may be required and are reasonable. If you are really struggling to meet obligations, then lowering your payment can be a solution to a cash flow problem, but I always recommend that we do our very best to get as close to your current total payments after the consolidation is done as is possible. If you are struggling right now, don’t wait, reach out to me. Call me today and we can get this process started now, and help you use your mortgage to build your financial stability.

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