Having a second mortgage is not uncommon. It happens more than you think. Taking care of these two mortgages can be tiresome and annoying. But you can fix this easily, by simply consolidating your loans. This article will show you four important reasons to consolidate your mortgages.
1. You can lower your interest rate
Right now, mortgage rates are close to historic lows. This means that you have the opportunity to save thousands of dollars on your loan. The lower the interest rate, the less you have to pay over the entire term of your loan.
2. You can get rid of your loan faster
Turning two loans into a single loan is always a good idea, but it gets even better if you turn them into a loan with a shorter term. Not only will you lower the total amount of interest that you have to pay, but your properties will also be yours much faster. The monthly payments will, of course, be higher, but, if you can afford them, this is by far the smartest thing you can do. On the long run, you will save money, even if you have to pay more right now.
3. You can lower your payments
Of course, there’s always the possibility that you find yourself in over your head and that you need to lower your monthly payments. Consolidating your existing mortgages into one loan can also help. You will end up paying more over the entire duration of the loan, but you will also be able to reduce the pressure on your finances and cut down on that monthly spending.
4. You can eliminate the risk of a variable-rate mortgage
Many people buy a home and later find out that they can’t afford it. And, if mortgage rates go up, things can quickly get out of hand. By consolidating your mortgages into a single fixed-rate loan, you will eliminate the concern of a significantly higher payment later in the mortgage.
Whether you choose to consolidate your mortgages or not, you have to make sure that you will benefit from it in the long run. Look at all the data and only make a choice after you’ve thought things through.