Refinancing and consolidating

You can usually acquire a lower interest rate than what you are paying on your current debts, especially if these are credit card debts.Another advantage is the possibility of switching from an adjustable interest rate to a lower fixed interest rate.A debt consolidation refinance loan is still a mortgage loan, and thus is eligible for tax deductions.

Applying for a debt consolidation refinance loan should not harm your credit report or your credit score because even though you are taking out another loan, you will also be paying off some or all outstanding debts, and if you pay your remaining refinance loan faithfully, your credit should actually improve.Now you can spend money on points to buy the interest rate down since you will keep the loan for a longer period of time.” Fleming goes on to advise doing this only if you believe that interest rates are stable or may drop.“Never make a decision to refinance or consolidate loans based only on the reduction in your monthly payment.How does this type of consolidation work and is it a good idea?To understand what happens when you consolidate you have to know a few things about the current loans you have.

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