If you are tired of debt collection companies calling you and your loved ones at all hours of the night, you may want to consider looking into a bad credit debt consolidation mortgage.
How Regular Debt Consolidation Works
A debt consolidation loan is a situation in which you borrow a sum in order to pay off all your creditors at one time. The loan is then repaid to your loan agency via a single monthly payment designed to fit with your budget.
How Bad Credit Debt Consolidation Mortgage Works
The premise of a bad credit debt consolidation mortgage loan is the same as a regular consolidation loan, with the exception of the fact that the loan money is borrowed against the mortgage on your home. Your mortgage serves as a promise to pay your loan back, giving your lender a sense of security in light of your negative credit history.
How it Affects Your Taxes
All of the interest charged in a bad credit debt consolidation mortgage (up to $1,000,000 for singles or couples or $500, 000 for married couples filling separately) is tax deductible. Regular consolidation loan interest payments cannot be deducted in your taxes and consolidation mortgage loans are therefore a great way to save yourself some money come tax season.
How it Affects Your Credit
As soon as you pay off all of the creditors or collection agencies to whom you owe money, they will cease to report you to credit reporting agencies. This means that your credit report will begin to improve immediately. In addition, if you make your debt consolidation mortgage payments on time every month, your credit report will also reflect this positive activity to future lenders.
*Affects pricing. With the No Closing Cost
Option, borrowers finance the closing costs instead of paying for them at
closing. Borrowers who pay closing costs at closing may qualify for a lower
interest rate. Some upfront fees (ex. credit report and appraisal) may apply
and may be credited at closing.
*Refinancing or taking out a home equity loan or line of credit may increase
the total number of monthly payments and the total amount paid when compared to
your current situation.
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