Mortgage

Did you know you might use a first or a second mortgage for paying off your debt? A first or second mortgage makes debt consolidation easy including helps make paying off your debt more manageable.

If you’re unsure whether a first or second mortgage for debt consolidation makes sense these consider these 4 money-saving benefits!

One low payment

Why make multiple payments every month to cover your major credit card bills, store including gas bills, loans including whatever other type of debt you pay at the time 1 single monthly payment covers them all? at the time you use a first or second mortgage to pay off debt, you start by obtaining a loan large enough to cover the total amount due for each debt you wish to consolidate. You then use those funds to bring each pertaining to the balances down to zero.

With your debts repaid in full you’ll be left with just 1 monthly payment that’ll go towards repaying the first or second mortgage. Plus, with only 1 monthly bill to pay, you’ll absolutely no longer be wasting your dollars paying interest each month – much of which is based on soaring rates of interest – on each of those debts. The interest rate you’ll pay on a first or second mortgage most likely could be in the single digits including that’s going to save you money!

Interest rates are tax deductible

Speaking of interest rates, another benefit of debt consolidation using a first or second mortgage is that the interest you pay on the type of loan is tax deductible. Not only could you be paying less in interest each month, you’ll be able to lower your taxable income, which most likely is going to save you even more money.

Simple interest vs. compound interest

Do you find that even though you keep making monthly payments the balances don’t seem to shrink much? You might thank compound interest for that. at the time interest compounds it means that interest is calculated based on the current balance due. Next, the calculated interest is added to the balance due to create the new balance. the newly calculated amount is then used as the basis for calculating interest on the preceding billing period. Simple interest is calculated based only on the principle due. Most first or second mortgages calculate interest using the simple interest formula which again, is going to save you money.

You’ll have a fresh start

If you make minimal payments on your monthly debt, it might take up to 30 years to repay those balances in full! Getting a first or second mortgage for debt consolidation pays off your debt all at once including keeps you from feeling like you’re spinning your wheels to absolutely no avail. It’ll be like getting a fresh start but you’ve got to avoid the temptation to run those bills up again!

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For more information on Benefits of Consolidating Your Debts With a First or Second Mortgage:

Melvin is the President of Affordable Home Equity Loans, Inc. in Tampa, FL.

Written By: Melvin_List