4 Tips to Consolidating Credit Card Debt with a Mortgage
Having debt in multiple credit cards can give you sleepless nights. This is because you end up having a bad credit report that hinders you from making other investments. Consolidating your debts into one big loan with a mortgage can help in boosting your credit report. Besides that, it’s a lot easier to make a single payment than settling different debts.
Below are some tips that can be used when consolidating credit card debt with mortgage.
- Act without Hesitating
Once you have concluded on refinancing your mortgage as the last option, you should act fast so that you can benefit from the increase in the cost of buying houses. The prices are actually influenced by the rate of inflation. If you refinance your home when the buying price is still high, you will be left with money that’s enough to pay a considerable amount of your consolidated loan. The good thing is that you can never resell your house at a lower price than what you initially bought it for. This is because the prices in the real estate sector are always skyrocketing. A reliable mortgage broker such as Altrua.ca can help you get the lowest rate in the market. This is due to the fact that they are always the first when a home gets listed in the marketplace.
- Make More Money
Since you can’t run away from your debts, you should find ways of making more money. When you have more money, you will be able to clear your debt much faster. This means that you have to do other businesses on the side to make ends meet. If you rely on your salary alone, you might remain in debt forever. And if you lost your job recently, you should consider doing odd jobs such as babysitting, pet sitting, driving a taxi and freelancing on the internet among many others.
There are actually many people that have succeeded in resettling their credit card debts by doing such jobs. When you clear most of your debts, your credit score will improve. On the other hand, you should avoid getting another credit card because it will only cause your credit score to dwindle. Maintaining your current credit cards is the surest way of protecting your credit score. Just remember that getting good credit score is easier than retaining the score.
- Cut Back on Expenses
You should look for ways to keep your expenses on the minimum so that you are left with some money to clear your credit card debt after paying your bills. You should therefore avoid spending your money on things that are not necessary. It really makes no sense to go for a holiday or shopping spree when you are in debt. In fact, you should exceed the amount that you reserve for clearing the debt so that you can free yourself from financial problems as soon as possible. You should also avoid eating out because cooking meals at home will cost you much less money than when you dine at a fancy restaurant or hotel.
- Get a Mortgage with a Short Term Period
When refinancing your house, you should look for a mortgage that has a short repayment period. This is because such mortgages come with a lower interest rate than loans that have an extended repayment period. However, you should ensure that you get your mortgage at a fixed rate to protect yourself from the changes in interest rates. If you don’t get a fixed rate, you will be required to pay extra money every month when the interest rate rises due to inflation.
