Originally Posted by srt4hokie
Question, if you trip across a house that is valued at say 160K but because of a given situation it's going for 125K will banks ever do a consolidation of credit card debt onto the mortgage due to the insane positive equity?
While I dont think its technically called a "consolidation" loan there are several ways to pay those CCs off and incorporate it into a mortgage.
1. If youre credit is good then I believe you can finance a mortgage for more than the price of the house and use the extra to pay off the CCs.
2. After purchase refinance for appraised value and use the extra money to pay off the CCs (called "cashing out"). Be aware that you can get up side down in a house if you get too crazy with financing and be stuck in a house you cant sell because you owe more than its worth when the market dips.
3. Second mortgage and the intrest is tax deductable as well. This would be my second to last choice since its just an extra loan payment and ties up income.
4. Equity line of credit. Least favorite choice since its almost like a CC but is tied into your home. Even though the intrest rate is lower than a CC if you get into a bind financially they can forclose on your house and kick you to the curb.
While Im no mortgage expert the above is what Ive picked up from Mrs myclone who is a mortgage broker (
shes the expert). If you have specific questions I can pass them along to her and she can prolly tell you what you need to know.