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High-interest credit card debt? Consolidate everything into your mortgage at lower rates and simplify with one monthly payment.
Rolling unsecured debt into your mortgage can free up hundreds of dollars a month. We show you the true break-even, including penalties and fees, before you commit.
Credit cards commonly charge around 20% annually, store cards more, and unsecured lines of credit sit well above mortgage rates. Secured mortgage money is the cheapest borrowing most households can access, because the lender has the house behind it.
Moving balances from 20% to a mortgage rate cuts the interest cost dramatically, and stretching the repayment over the mortgage amortization cuts the monthly payment further. The combination is what turns an impossible month into a manageable one.
A longer amortization means more total interest if you only ever make the minimum payment. A $30,000 balance repaid over 25 years costs more in total than the same balance cleared aggressively over three years, even at a much lower rate.
The way to get both benefits is to consolidate for the cash flow, then use the freed-up money as a prepayment against the mortgage. Almost every mortgage allows annual lump sums and payment increases without penalty. Consolidation buys breathing room; the prepayment is what actually clears the debt.
Utilization — how much of each limit you are using — is one of the largest factors in a credit score. Paying several maxed cards down to zero usually produces a noticeable improvement within a couple of reporting cycles.
That improvement only holds if the balances stay down. The most common failure is running the cards back up while the consolidated balance sits inside the mortgage. Where it helps, we recommend closing or reducing limits as part of the refinance.
A consolidation refinance can take your mortgage up to 80% of the appraised value. Costs typically include an appraisal, legal fees and, if you are breaking a fixed mortgage mid-term, a penalty. We total all of it and divide by the monthly saving to show a real break-even.
If you do not qualify with an A lender, because the credit damage is recent or income is hard to document, alternative and private lenders can bridge a term while the file is repaired. We treat that as a one-to-two-year plan with a defined exit, not a destination.
Unlike bank employees who work for one lender, mortgage brokers work for your clients. We're licensed professionals with a legal duty to find you the best solution—not push a particular product.
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