Mortgage Rates and Debt Consolidation

Authors Website: http://www.debtconsolidationwise.com/

Current mortgage rates are extremely low, so it's a lucrative time to buy a home. Current rates will affect your monthly mortgage payment, but are not the only determining factor. Credit score, income, other debts, and purchase price also influence what your mortgage rate will be.

If you have bad credit and do online debt consolidation, buying a home could prove challenging, regardless of current rates. Online debt consolidation is the Internet-based process of combining all debts into one large monthly payment. Alone, online debt consolidation doesn't affect your credit score. However, many lenders view participants of online debt consolidation programs to be risks and therefore may provide a higher rate. Yet to improve your credit and get a better rate down the line, online debt consolidation is a useful strategy.

If you own you home and want to take advantage of low current mortgage rates, refinancing is the solution. When refinancing, one can lower monthly payments and pull equity out of a home.

Some refinance and use the new loan to help with online debt consolidation, since online debt consolidation allows repayment of debts at lower interest rates. There are tax benefits for home equity loans, so that is incentive for online debt consolidation. Yet risks involved with home equity loans come from the possibility of losing one's home if payments are missed. You should only consider home equity loans for online debt consolidation if no new debt will be incurred during the loan.

Refinancing at current mortgage rates incurs new closing costs, and online debt consolidation may cost a monthly fee if using a service. Both can be beneficial, but any benefits can be counteracted if destructive spending patterns aren't corrected.

Stay abreast of current mortgage rates if looking to buy or refinance a home. If buried in debt, buying a home could still be in your future as long as you resolve to stop the downward spiral and get control of your credit. By participating in online debt consolidation or other debt reduction plans, you can be checking the current mortgage rates and buying a home within a year or two. And don't forget, you can use mortgage payment calculators to calculate the total costs over the life of a mortgage based on average current mortgage rates.

©2005 Leslie Hall
For more information, please visit the authors site Debt Consolidation Wise

Note: This article was submitted by a second party and the contents are subject to our disclaimer.