Debt Consolidation Or Home Refinance ?

Here is the Debt Consolidation vs Home Refinance Situation: You are in credit card debt, more than you can handle. You own a home. You are thinking of a Home Refinance your home to pay the debt off. Like many people, you take to the internet and search like crazy for advice. Unfortunately the advice is often biased; Mortgage Companies, Refinance Companies, and Home Equity Loan Companies' websites are saying its a great idea, credit counseling and debt consolidation companies are saying its not. Who do you believe? Below you will find a simple answer.

Don't Refinance Your Home. Here's why: Credit card debt is "unsecured", meaning there is nothing that you own that is attached to it. Default balances on credit card debt are not recoverable by your assets, and the rate can be as high as 30% or more. If, starting this morning, you made the decision to never pay another credit card bill ever again as long as you lived, the cost of this would amount to the grand sum total of of $0.00.

A Home Mortgage, on the other hand is "secured", much like a car payment. The house and property that you live in is attached to the Home Mortgage you have. Default balances on mortgage debt are recoverable by your assets (the same house in question). If, starting this morning, you made the decision to not pay your mortgage-the cost of this would be to Forfeit your Home.

Talk to a Debt Consolidation Expert

When you sit down with any unbiased financial advisor to discuss options of getting out of credit card debt, they will not only be looking at your financial situation as it is today, but how it will be next year, in five years, or even ten years down the line. By constantly cashing out our most valuable asset - equity, is to deny ourselves of the American Dream.

Other Creative Mortgage, Equity and Debt Ideas There are other creative ways to handle credit card debt without tapping into the our most valuable resource, our equity. Taking a long hard look at our personal and household budget can usually help alleviate the burden. Smaller, unsecured signature loans are also an option. So is taking a part time job for a time. Almost everyone can find 10-15% of extra income with an honest look at some lifestyle changes.If you have come to the fork in the road trying to decide if you should opt for a Home Refinance or Debt Consolidation, talk to a Professional non-profit Debt Management firm.