Debt Consolidation Options for Orange County Homeowners

By Kelly Richardson
Local Lender Columnist
Sep 28, 2006
Orange County, CA homeowners who are tired of paying the exorbitant interest on credit cards can use the equity in their homes for debt consolidation purposes. Read on for a summary of debt consolidation options and what they might mean for your particular financial situation.

If you're like most Orange County residents, your home is your most valuable investment, both personally and financially. As credit card APRs continue to rise, your home might lift you out of the shadow of debt. Did you know that Orange County, CA residents can take advantage of home equity to combine several minimum payments into one low monthly payment? And the best part of the deal is that your new payment is often less than all the others combined. Here's how debt consolidation works and how it will affect your mortgage payments.

Debt Consolidation in Orange County, CA

• Home Appraisal. Your lending institution will have your home appraised to determine its worth. Many lenders will allow you to borrow up to, and in some cases over, 100% of the value of your home.
• Mortgage Restructure. Once the value of your home and the loan amount has been determined, you will sign a new mortgage agreement that reflects the new payment amount.
• Debt Payoff. Your lending institution will either pay your creditors directly, or they'll simply cut you a check. The process can take anywhere from a week to 10 days to complete in most cases.

One of the most important decisions you will make throughout the process is who gets your business. You can choose from among commercial lenders, credit unions and other reputable sources. Here are some questions to ask them.

Choosing a Debt Consolidation Partner

• Mortgage Rates. Of course you'll want to know who is offering the best rates on a new mortgage. Credit unions usually win this category.
• Mortgage Options. Fixed-rate? Adjustable-rate? Or maybe Option ARMs? Commercial lenders typically have the most lending options from which to choose.

The main thing to remember is to shop around before you make a decision. Getting the best deal requires a little legwork on your part.

Sources:

Orange County's Credit Union
Orange County Government Online


About the Author
Kelly Richardson has over 15 years of creative and technical writing experience. He teaches secondary Honors-level English and writes ad copy for a variety of clients in specialized industries such as medicine and technology. Kelly holds Undergraduate and Graduate degrees in English and Education from Georgia State University. He is currently pursuing a Doctorate in Educational Policy & Leadership from Berne University & International Graduate School.