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Tips on refinancing and consolidating debt

"I would only suggest this as a last-gasp strategy," says Susan Reynolds, author of "One-Income Household." "In general, rolling credit card debt into mortgage loans is not a good idea. If you renege, they can pester you for payment and ding your credit report, but they cannot confiscate your home." Todd Huettner, president of Huettner Capital, a mortgage brokerage specializing in debt consolidation, advises homeowners to answer three questions before rolling debt into a home loan: After working with nearly 5,000 families, Susan White of Plan Plus Inc.

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The more equity you have, the more money you may be able to get from a cash-out refinance.It’s possible to add the costs associated with getting a new mortgage into the total refinance amount to avoid paying anything out of pocket at closing.However, refinancing to get cash out or consolidate your debt may result in a longer loan term or a higher rate, and that might mean paying more in interest overall in the long run."We were property-rich and income-poor," says Jo Ann.The couple had refinanced six years before, but when mortgage rates dropped to historic lows in May, they saw an opportunity to eliminate their credit card debt by refinancing their home and rolling $25,000 of credit card debt into the loan.The average credit card interest rate is around 15%.

By comparison, mortgage rates are currently in the 3–4% range.

Others succeed because debt consolidation is part of a bigger plan to gain control over their finances.

So the first step in debt consolidation is simply to consider whether it will actually work for you.

If you have loans with relatively small balances or loans in the hundreds of thousands exploring a consolidation is worth the time investment.

While consolidating your loan pay close attention to the new interest rate you will receive.

Make sure that you pay attention to the APR rate that you will receive to account for any fees that may be associated with the process.