The balancing act

Throughout the course of your life, you’re likely to encounter dozens of different types of debt. You’ve got your couple of credit cards sitting in the wallet, that department store card that never seems to get paid off fully, your car payments and, of course, your mortgage. Chances are your mortgage is going to be the highest level of debt you currently have on the books, meaning you’re throwing much of your paycheck at that every month. But that doesn’t mean the other forms of debt aren’t important, too. In fact, you may feel satisfied about paying off the mortgage every month because it means you own a little bit more of your house than you did the month before. But throwing a few hundred dollars at a credit card to pay off the tab on a bunch of clothes that you don’t wear anymore can be significantly less rewarding. Still, you must learn to balance all your debt and treat them equally. After all, they all affect your overall credit score.

Combining your consumer debt and mortgage

So, how can you attack all your debt at once without sacrificing your house? One option for you might be to roll your consumer debt into the mortgage that you are already paying. Effectively, you will be borrowing money against the mortgage to pay off the consumer debts that you have elsewhere, meaning you can pay off your high-interest credit cards and other forms of debts and simply make one monthly payment instead of multiple payments. This can be very effective, if for no other reason, because it allows you to get better control over the payments and allows you to know and understand what you owe every month. Many Americans struggle to make payments simply because they forget to make payments on time. By rolling all your debt into your mortgage, you can avoid this and still pay off your debt at one interest rate.

Things to be wary about

Just because some mortgage companies offer you the opportunity to roll your consumer debt into your mortgage doesn’t mean that you’re home free. For one, you should understand that rolling over your consumer debt into your mortgage doesn’t eliminate the debt. You may save yourself money but you won’t eliminate the debt. You’ll simply owe more money on your mortgage. Also, rolling over consumer debt should give you the opportunity to think about where you are spending your money. Get rid of all your credit cards except one. Pay off any loose department store card payments that you may have forgotten about. Overall, think about your credit history and how you can avoid amassing more consumer debt. In the long run, using your mortgage to pay off your other forms of debt should be helpful not hurtful. So act responsibly and, of course, be careful about financing your debt with a credible lender.

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