"I would only suggest this as a last-gasp strategy," says Susan Reynolds, author of "One-Income Household." "In general, rolling credit card debt into mortgage loans is not a good idea. If you renege, they can pester you for payment and ding your credit report, but they cannot confiscate your home." Todd Huettner, president of Huettner Capital, a mortgage brokerage specializing in debt consolidation, advises homeowners to answer three questions before rolling debt into a home loan: After working with nearly 5,000 families, Susan White of Plan Plus Inc.
You will pay significantly more in interest over the life of the homeowner's loan than you would if you chipped away at your credit card debt over a period of three to five years. has her own reasons for advising against rolling debt into home loans.
"Not only does he help us think outside the box, he will hold us accountable.
I don't want him coming for a meeting and seeing a new Lexus in the driveway!
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It was their third refi since buying their house in 1995 and, this time, they hired a professional adviser.
Since much of their credit card debt went toward home repairs, he convinced them to take out an extra ,000 to stash away as an emergency fund. While the couple's mortgage payment increased by 5 (they were hoping to reduce their rate from 6 1/8 to 5 percent, but their broker locked in late), they netted 0 in monthly savings.Whether or not refinancing their debt proves a smart move may depend on whether they take the next steps: Whether you decide to consolidate debt into a home loan or chip away at it the old-fashioned way, have a plan in place.Cutting back on your lifestyle and changing spending behavior "takes sweat," says Huettner.The theory is that, by consolidating, you end up paying less each month, thereby taking some pressure off those monthly household finances.There is no single answer to this question, since a lot depends on your circumstances - in particular how much debt you have, from how many sources and what level of interest you pay on it.Their adviser also helped them design a plan to avoid future debt and pay off their mortgage early.