Michele Jeppson - Mortgage Loan Specialist Debt Consolidation Refinancing Planner 
Mortgage Financing - How To Reduce Your Mortgage Payments - Stop Foreclosure - FHASecure Refinancing Info
Specialist planner for: Utah Hawaii Connecticut Alaska New Hampshire Massachusetts Rode Island Delaware Virginia Georgia Florida Michigan Kentucky Minnesota Missouri Nebraska New Mexico Arizona Wyoming

Mortgage Advice to Get You Out of the Hole & Reduce Payments

Do you have more month than you do money?
If you take the time to learn and understand how to reduce your monthly payments you will see how your home can be your biggest leverage tool to help get you out of the hole. When I first start working with homeowners and going over their mortgage refinancing options more often than not they immediately tell me they do not want to include their vehicle loan into their debt consolidation.

Why would they want to include a car loan that will be paid off in the next 3-4 years into a 30 year mortgage loan?
It just doesn't make sense right?
Well, it doesn't make sense until you get debt consolidation advice to help you understand cash flow and how to make your mortgage loan work in your favor. Let me show you an example of housing loan refinancing for debt consolidation.

Current Monthly Payments
$2,380.18 = Principal and Interest 1st Mortgage Payment $571.87 = 2nd Mortgage Payment $442.00 = Car payment $250.00 = Revolving Credit Card Payment $126.00 = School Loan Payments $90.00 = Loan against 401k TOTAL of all MONTHLY PAYMENTS = $3,860.05

Current Balance for Debts
$279,552 = 30 year fixed rate first Mortgage at 7.75% $56,275 = 20 year second Mortgage at 9.25% $20,300 = 5 year vehicle loan at 10.99% $12,500 = Revolving Credit Card Debts $9650 = School Loan $2350 = 401k Loan

Proposed Debt Consolidation Refinancing Loan Option
$398,852 = New 30 year fixed rate FHA Mortgage Loan at 7% = $3067.30 Principal and Interest Payment. The new loan amount is including all of the debts listed under the Current Balance for Debts above plus adding 4% for the closing costs associated with refinancing a new mortgage loan.

New Monthly Savings Breakdown
$3,860.05 (Current total for all monthly payments) -$3,067.30(Proposed Monthly Payment for new Debt Consolidation Refinance Loan Option) =$792.75 Monthly Savings

Are you starting to see the bigger picture?
The debt consolidation loan refinance option mentioned above applies to all different homeowners scenarios. Whether you are the person living paycheck to paycheck or someone looking to capitalize every possible option to increase your wealth: a Home Mortgage Debt Consolidation Loan is the way to go. It is just a matter of finding a home mortgage loan that works for you.

Who couldn't use an extra $792.75
a month? If you take the savings of $792.75 and DO NOT invest it to build your wealth you ultimately are elongating paying off your debts and stretching your debts out for 30 years. You know what, that is OK and works for many people. It is a solution to the financial bind they are currently in and may help stop the downward spiral many homeowners are facing in today's market.

If you are the homeowner looking to capitalize your options and payoff your debts, you take the $792.75 savings and apply it directly to the principal of your new debt consolidation mortgage each month. Remember the car I mentioned homeowners being Leary to stretch out into a 30 year mortgage? Well, lets do the math using the scenario above. If you have 4 years left on your car payment at $442.00 per month the total you will pay without adding it to your new debt consolidation loan is as follows: $442 x 48 months = $21,216.00

Let's figure out how many months it will take to pay down the balance on your new mortgage for the portion your car added to your newly refinanced loan. The payoff we added to the new loan for the car was $20,300. If we take $20,300 divided by your proposed monthly savings it equals 25.61 months.
$20,300/$792.75=25.61 months/12= 2.13

By using your home as a finance tool with the scenario listed above you are able to have your $20,300 debt from you original car loan paid off in 2.13 years instead of 4 years. You also saved $916 in unpaid interest on your car loan. The debts you consolidated into a new first mortgage will increase the amount of mortgage interest you pay each year. This equates to a larger Mortgage Interest paid to file at tax time. Make sure to consult your tax accountant to maximize your mortgage interest write offs.

Let's go through the rest of the debts we included into the new debt consolidation mortgage loan and figure out how many months it will take to pay the balance off for them from your new principal loan amount. Revolving Credit Cards: $12,500 with a payment of $250 per month. $12,500/$792.75 = 15.76 months/12 = 1.31 Years School Loans $9650/$792.75 = 12.17 months/12 = 1.01 Years Loan against 401k $2350/$792.75 = 2.96 months = 1/4 of a Year 4% Closing Cost for new loan = $15,954.08/792.75 = 20.12 months/12 = 1.68 Years

Total of all months for the debts we consolidated in the mortgage refinance options 25.61 + 15.76 + 12.17 + 2.96 + 20.12 = 76.62 months / 12 = 6.39 Years

Want to go one step further?
If you continue applying the $792.75 savings from doing the debt consolidation mortgage loan after the first 6.39 years (Which is the time needed to re coop your closing costs and pay down the balance on your mortgage) you will have your house completely paid off after 2 months into year 17 of your new mortgage loan.

That saves you 13 YEARS on your mortgage and equates to hundreds of thousand of dollars in savings over the life of your loans.
Hundred of thousands you say? How so, well take your house payment of $3067.30 per month times it by 12 months and then times it by 13 years. 3067.30 x 12 = 36807.60 per year times 13 years = $478,498.

So is it worth 4%(15,954) in closing costs out of your equity & putting your car into your mortgage loan?
HELL YES IT IS!

More Mortgage & Loan Advice Articles By Michele Jeppson Mortgage Loan Refinancing Consolidation Specialist Planner