Is Refinancing Better Than Second Mortgage?
When it comes to availing a debt consolidation mortgage loan, many people get confused between refinancing and second loan. Both can solve the same financial purpose, but they work in a different fashion. Let me give you an example. Suppose you are the owner of a home with $250000 as equity. It means the current face value of your home is $250000. If you owe $200000 on home loan, you still have $50000 of home equity that is unused. You can now use this remaining amount of equity to refinance the existing loan or take out a second one. When you choose to refinance, $50000 will be added to your current mortgage. It means, you will still have a single loan, but with an increased amount. On the other hand, if choose to take out a second mortgage debt consolidation loan, you will simply be borrowing an additional loan of $50000. However, in both the cases, you can use the additional amount of money to pay off other existing debts, including credit cards, student loans, car loans, personal l
