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DEBT CONSOLIDATION LOAN / PERSONAL DEBT RELIEF PROGRAMDebt consolidation is the primary reason people refinance today. Since property has appreciated in value, many clients decide to use the "equity" to reduce their monthly payments. There are many programs to unlock the equity in your home and reduce your payments. Debt Consolidation Refinance In a debt consolidation refinance, determine the balance of your mortgage, and the amount of cash you are taking out plus any closing costs. The total is your loan amount. An appraiser will determine the value of your property which will be used to determine your Loan to Value (LTV). There are programs which will allow you to borrow 80, 90, or even 100% of the value of the home in this "Debt Consolidation Refinance" transaction. One way to make a refinance work for you is to refinance for more than the balance remaining on your old mortgage -- in effect, tapping your home equity, or "cashing out," . Thanks to favorable rates, you may be able to do so without increasing your monthly payment.
Debt Consolidation Second Trust Loan A second trust loan can be a very useful tool if you have a low rate first trust but still want to use some equity in your home. Some useful Second Trust programs include: 1)A traditional second allows you to borrow up to 95% of your appraised value. The program allows a debt to income ratio (use this calculator to find out your debt ratio: DTI Calculator) of up to 45%. If your ratio is too high, some debt can be paid at closing lowering your ratios. 2) An expanded second trust allows you to cash out up to 100% of your appraised value. Please note that your interest rate will increase as the loan to value increases.
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