Debt Consolidation Options Can Save Your Home

By Karen Lawson
Local Lender Columnist
Aug 10, 2007
Using credit to cover household expenses can cause problems. As your debt increases, so can additional costs associated with late fees and high balances. If your family finances are about to sink from taking on too much debt, it's time to consider debt consolidation options.

Refinancing Can Provide Cash Flow and Reduce Costs

Many homeowners think about household finances from month to month. You may have a silent resource in your monthly budget battle. If you have enough home equity, refinancing your mortgage can provide cash for repaying debt. It's often possible to reduce your payments enough so that the payment on your new mortgage is less than the total of your old mortgage payment and all of your consumer debt payments. Refinancing can be a great way to put your budget back on track. It's important to develop a cash budget and savings plan for emergencies. Non profit credit counselors or a financial advisor can help.

Debt Consolidation through Credit Counseling

If your mortgage is going into foreclosure, you must act immediately. Texas law provides for fast foreclosure proceedings, and you could lose your home within a very few months of the time foreclosure begins. Your lender may offer foreclosure alternatives, but if your have too much consumer debt, a reputable credit counseling agency can help. It's important to verify that you're dealing with a firm that doesn't promise to "remove bad credit" or "repair your credit report." The only cure for bad credit is time and timely payments. Credit counseling agencies can work with your creditors to reduce payment amounts, interest rates, and fees. You may have to cut up your credit cards as part of your debt repayment plan, but saving your home is a top priority.

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds a Master's degree in English from the University of Nevada, Reno.