Pros and Cons of Consolidating Debt With PHH Mortgage
If you’re mulling consolidating your financial obligations with a mortgage refinance, you’re in good company. For those who own homes, consolidation is a popular strategy. However, as with most any approach, there are things to consider. Here are some pros and cons of consolidating — with PHH Mortgage.
What is PHH Mortgage?
PHH Mortgage is a 37-year-old non-bank lender, so, it’s established, that’s for sure. The company provides a host of mortgage loans, including conventional, jumbo, VA, and FHA, fixed-rate, adjustable-rate, rate-and-term, cash-out refinancing as well as financing for vacation homes and investment property.
Also read: 7 Simple Steps To Getting A Business Loan
What Else Does PHH Offer?
Well, for eligible borrowers, the New Jersey-based company offers homeowners assistance programs. Plus, the company’s website is complete with resources such as checklists, educational articles, and calculators.
Also, borrowers can usually get pre-approved in a single business day, and would-be borrowers with a thin credit file may be able to use a bill-payment history to show they’re creditworthy. Customers tend to particularly appreciate the flexible loan requirements. Check out what they say in PHH mortgage reviews.
Note that there are no branch locations; you’ve got to apply for loans online or by phone. There also are no USDA loans.
What is Debt Consolidation?
In general, it means rolling multiple debts into one payment with a new loan. In this case, it would be through a PHH Mortgage refinance. In doing so, you’ll relieve yourself of having to deal with numerous debts of varying amounts and due dates.
Here are some benefits of consolidating through mortgage refinance:
- Just one payment. We’ve already said it, but again: when you combine your obligations into a new mortgage, you’ll have stream-lined bill paying.
- You’ll be able to see the end. Making minimum payments on your credit cards will take you years, if not decades, to finally clear your debt. With mortgages and most other loans, you usually have a fixed end date.
- You’ll also know how much you’ll pay, the due date, and the amount that will go toward the principal.
- Better interest rate. If your credit’s at least “good,” you can get a much better interest rate than what you’re paying in the aggregate on your credit cards.
- IRS goodies. You might be eligible for a mortgage interest deduction, which could save you cash when Uncle Sam comes a-calling. The deduction would let you claim a lower-income based on how much interest is paid on your mortgage.
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Here are some disadvantages of consolidating through mortgage refinance:
- You’ll need many years to pay the debt off. Like, 15 to 30 years, which is how most mortgages are structured.
- The better your credit, the better the terms. However, if the situation that you’re in that precipitated consolidation resulted in dinged credit, then you may not get ideal terms. At length, that’ll cost you.
- You could lose your crib. Then there’s that. Using your home as collateral is always fraught. If you miss payments, know that your house is on the line.
- A host of fees. As with most mortgages, you’ll likely face several kins of fees, which are collected when you close or are added to your mortgage obligation.
Now that you know the pros and cons of consolidating debt with PHH Mortgage, you can move forward with confidence and get your finances back on track. Just remember that your home IS on the line with this financial strategy, so just make sure you handle things prudently.