Consolidating credit card debt into line of credit
Many factors can help you get a better interest rate with a bank or credit union including your credit score, your net worth, whether or not you have a relationship with them and whether or not you can offer good security (collateral) for a loan.
These rates are a lot higher because these companies tend to lend money to people in financial situations that involve more risk than banks usually want to take on.If you do have to pay a higher interest rate on your second mortgage you can setup the due date for your second mortgage term to correspond with the due date for you first mortgage so that you can combine them together at the bank's best interest rate when they need to be renewed (again talk to your bank to learn more).Ever since the early 1980's mortgage rates have been declining.This means that we cannot count on them to stay this low forever.The average five year mortgage rate over the past 60 years has been 8.95%.High interest loans like these can be used as a tool to get you from point A to point B, but you should do your best to find a better arrangement as fast as possible.
It is very hard to get ahead paying really high interest rates.
However, if you don't qualify for a debt consolidation loan, then a solution to your situation may be a little more complex than you may have thought and your best bet may be to speak with an experienced Credit Counsellor as soon as possible so that you can find the right solution before it's too late.
Speaking with a non-profit Credit Counselor is completely free and most of them possess a tremendous amount of experience in the credit industry.
You would then have two mortgages: your first mortgage and a second mortgage which could be your debt consolidation loan.
There is a lot more to this process than we've mentioned here.
These terms refer to the bank lending you money against the portion of your home that you own.