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How to Refinance a 2nd Mortgage – The Home Refinance Calculator for Debt Consolidation
The most powerful tool you have, the one thing that is going to offer you leverage in getting control of your debt, especially credit card debt is your house. Your house offers instant collateral for that large loan you may need while the refinance offers you a low mortgage rate. Much lower then the rate on your credit cards. Refinancing your home and rolling your revolving debt into that same loan can help you get control before the situation gets out of control. Yes it does seem like what one is doing is trading one form a debt for another, but there is a difference. There is such a thing as good debt vs. bad debt. Good debt is any money borrowed to acquire a commodity that appreciates in value. So in other the words, the value of what you are buying increases with time. Another type of good debt is when the interest that you are paying on a loan can be a deduction on your taxes. Then it only makes sense that bad debt is the opposite. It is a debt owed on property that decreases in value over time, like a car. You are paying for something that is worth less then the total amount you will pay for it. To improve your credit and make the debt look better, consider taking out a 2nd mortgage on your house. This can also be termed a home equity loan, or possibly a refinance can be done. What the second mortgage will do is look at the value of your home less the amount that you owe on it. The difference is your equity. This is money that you can borrow to pay off your debt. Say your house is appraised at $250,000 and you owe $175,000. That is $50,000 difference that you can take out a second mortgage on. If your debt that you are trying to roll into this mortgage is only $30,000 then only take the thirty thousand. You don’t want to tap into all of your assets, but you do want to increase your good credit. There are some things that you need to look out for when it comes to finding the right 2nd mortgage for you. Watch the APR, don’t run after the first one you see shop around. Secondly avoid any 2nd mortgages that carry default penalties when you miss a payment or if you are late. Though we never intend for those things to happen, it happens to the best of us. Thirdly make sure that there isn’t a prepayment fee. If your financial situation was to turn around you don’t want to be penalized for getting the second mortgage taken care of sooner. Flexibility is vital so don’t lock yourself into something that you may want out of later. Also beware of any 2nd mortgages that include voluntary insurance policies. Yes, the idea sounds great but you may not need the extra coverage. Are there any balloon payments in the terms of the 2nd mortgage? There are some 2nd mortgages that will start with lower payments so that it sucks you into making that huge payment in the end. Make sure that you are getting a second mortgage that is going to help you get control of your situation and not create another situation that you will want out of. 
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