If you want to get a debt consolidation loan to repay charge card debt, and you possess a house, should you get a new mortgage, or do a cash out refinance in your existing mortgage?

Both are forms of debt consolidation; this is how they work.

If you possess a house with sufficient equity, you could get a new mortgage to pay for off the old one. If your present mortgage is $100,000 소액결제 현금화, and you need $50,000 to repay your charge card debts, you could get a new, $150,000 first mortgage. The initial $100,000 visits repay your existing mortgage, and the excess $50,000 goes towards your charge card debt. You wind up without charge card debt, and a $150,000 mortgage.

In a debt consolidation loan through a cash out refinance deal, instead to getting a new consolidated first mortgage, you get a new second mortgage. Continuing our previous example, instead to getting a new $150,000 first mortgage, you keep your $100,000 mortgage and get a new second mortgage for $50,000. You're getting cash out of your house, which is why it is called cash out refinancing.

Which is really a better deal? The solution depends on a number of factors, including interest rates.

If your present first mortgage are at a low interest rate, you probably want to help keep it in position; borrow the additional money you need with a new second mortgage. However, if your first mortgage are at a greater interest rate, and you can negotiate less combined rate on a new mortgage, the new mortgage may be the solution to go. Watch out for the fees and penalties to break your mortgage, which must be factored in to the calculation.

Other factors to consider would be the length of the residual term in your mortgage, and your tax bracket, since in the United States interest in your mortgage on your house is tax deductible, so mortgage debt is better than charge card debt.

Consult a mortgage expert to help you make the decision. Either way, a mortgage more often than not features a lower interest rate than your charge cards, so whether it's a cash out refinance or a consolidation in your existing mortgage, evaluate your options, and pick one that is most beneficial for you.