Bedroom Canopies

More and more homeowners are electing to refinance their mortgages with cash back for debt consolidation. There are a number of advantages to paying off your bills when refinancing; however, taking out a new home loan to consolidate debt is not without risks. Here are several tips to help you decide if refinancing to pay off your bills is the right choice for you.

When you refinance your mortgage to consolidate bills you are borrowing against the equity in your home with a new mortgage loan. Youll use the new loan to pay off your old mortgage and the difference between the balance you owe and the amount you borrow will be paid to you at closing.
The equity you have in your home is the difference between the amount you owe on the existing mortgage and the appraised value of your home. Many homeowners value equity as their nest egg and borrowing against it reduces your ownership of your home. There are however a number of favorable advantages to refinancing with cash back for debt consolidation.

The main reason is that you gain a tax deduction for your existing debt. The interest you pay on your primary mortgage loan is fully deductible on your Federal income tax. By paying off your credit cards, car loans, and other personal loans with your home equity youll reduce your monthly bills to one payment and lower your tax liability at the end of the year.

Before you refinance your mortgage and withdraw your equity it is important to understand that mortgage refinancing is not without risk. Not only will you be giving up ownership in your home by withdrawing your equity, you will be starting the amortization of your loan from the beginning. Amortization is the process of paying the interest and loan principal. Because mortgage loans are front-loaded with interest, in the early years of your loan most of your payment is applied to mortgage interest. This means that youll build the equity you borrowed at an even slower rate than your existing loan.

You can learn more about refinancing your mortgage while avoiding costly mistakes with a free mortgage video tutorial.

To get your FREE six-part Mortgage Refinancing Tutorial, visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this free video tutorial: "Mortgage Refinance - What You Need to Know," which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com.

Get your free mortgage refinancing tutorial today at: http://www.refiadvisor.com

Mortgage Refinance Loan

You may have heard the term home equity loan but are not really sure whether this type of loan will work for you. The first step is to understand the concept of home equity. Equity is the difference between the current appraised value of your home and the amount that is owed on the home. So, for example; if your home has recently appraised for $200,000 and you only owe $100,000 on it then you have $100,000 in equity in your home.

Many homeowners like the idea of taking out a home equity loan when they need to fund a home improvement or make some other type of purchase because they can often obtain the money they need at an interest rate that is lower than charging it to a credit card. In addition, there are also possible tax advantages as well.

When you take out a home equity loan you are taking out a second mortgage that gives you the ability to convert the equity in your home into cash. You can then spend that cash on any number of expenses including college education, medical expenses, debt consolidation, home improvements and much more.

You will generally need to decide whether you wish to take out a home equity loan or a home equity line of credit. These two terms are different. A home equity loan provides you with a one time lump sum of money that you will then pay off over a specified period of time at an interest rate that is fixed. It is much like your first mortgage.

A home equity line of credit, commonly referred to as HELOC, is more similar to a credit card. Instead of receiving the sum of money at one time, you will then have the ability to borrow up to a specified amount of money for the duration of the loan. That time period is set by the lender. As you pay off the principal amount of the loan, you can once again use the credit. In this regard, a HELOC is much like a credit card.

There are advantages to both a home equity loan as well as a HELOC. Many homeowners prefer the flexibility of a line of credit over a fixed rate equity loan. If they do not need all of the money up front, they are able to maintain control over how much money they draw down from the loan. The disadvantage to a line of credit is that it frequently features an interest rate that is variable. This means that the payment amounts will vary based on the prevailing interest rate.

In most cases, the draw period for a line of credit is between five and ten years while the repayment period ranges between ten and fifteen years. You will usually be able to access the funds of a line of credit with a credit card, check or electronic transfer that can be ordered by phone. Typically, an initial advance is required when the loan is set up.

If you are ready to consolidate debts, make home improvements or make a big purchase, visit Home Equity Loan or Home Equity for more information on home equity loans.