Debt restructuring through a mortgage broker
A mortgage broker can offer a ray of hope for consumers with bad credit that are hoping to restructure their debt. In such instances, consumers may be able to securitize credit card or other unsecured debts with the equity in their homes with a broker's help.
When a consumer with bad credit is struggling with a serious debt load but owns their own home, seeking out a mortgage broker can be a good option. This is because a mortgage broker can communicate the consumer's circumstances to various lenders more efficiently than the person could on his or her own.
In order to get the loan approved, the lender first needs to have an understanding of the potential borrower's situation.
Consumers with bad credit who are hoping to restructure their debt may want to seek out a mortgage broker that will outline how much their services cost before they are ever retained. Many brokers will instead make their money by adding a markup to prices they are given by wholesale lenders.
Borrowers with bad credit who secure their loan with their home equity will end up paying a higher interest rate.
Although unsecured creditors can be paid off in this manner, individuals with bad debt will need to make sure they don't fall back into bad habits. If they do, they could end up losing their home.
Consumers that are considering a bankruptcy due to the scope of their debt should speak with a bankruptcy attorney before securitizing their debts.
Published: June 12, 2007
- Paid a charged-off debt; now what? – It’s not enough to just pay a charge-off and forget about it. There are some cases in which the information about the paid charge-off doesn’t get to the credit reporting agencies ...
- Tips, tools for setting up a side gig to get out of debt – A part-time job on the side can help increase income to pay off debt ...
- Recession foreclosures disappearing from credit reports – With their credit reports cleansed, "boomerang buyers" are returning to a still-depressed housing market ...