Do you have a number of high interest debts? If so, you might be thinking about consolidating them with a mortgage refinance or a different type of debt consolidation plan.

There may be costs associated with consolidating debt, but in many cases, the benefits far outweigh them. Below, you can discover some of the ways in which consolidating your debts may help you achieve your financial goals as a homeowner.

7 Benefits of Debt Consolidation for Homeowners

1. Reduce your interest rate. One of the main reasons to consider consolidation is if your current credit score qualifies you for a lower interest rate than what you are paying now on one or more of your debts. A lower interest rate means lower monthly payments, which can make your financial life more flexible and affordable.
2. Pay off your debts more rapidly. Every extra bit of interest you are paying is slowing down your progress in paying off the principal on your loans. So, just by consolidating your debts with a lower interest rate, you speed the process up, sometimes considerably.
3. Pay less interest overall. So long as your debts exist, they will continue to accrue interest. That means that the more rapidly you can pay them off, the sooner they will stop accruing interest. This translates to less interest overall over the lifetime of your loans. Depending on your situation, that could add up to a substantial amount of money you can save through debt consolidation.
4. You are less likely to miss payments. How many debts are you paying on right now? Can you give the number instantly, without stopping to think about it? If you do have to stop and think, is it easy to miss one or two? Have you ever missed payments in the past because you forgot about a debt? This is a situation you can leave behind if you consolidate all of your debts. In the future, you just have to remember to make that one payment. You could even set it up to come out of your account automatically. When you submit timely payments each month, you avoid late fees and other expenses and hassles.
5. Your financial life will be simpler and less stressful. As a homeowner, you already have a lot of financial responsibilities to juggle when it comes to making payments on your mortgage, submitting property taxes, and taking care of maintenance, utilities and repairs. When you are trying to pay off a number of other debts on top of that, it just adds needless stress and complexity to your life. But when they are all consolidated, that stress and complexity are minimized. You can then focus more on the other payments you need to make to take care of your home.
6. Your credit score might increase. It is possible your credit score could improve if you consolidate your debts. By lowering your interest rate and making them more affordable, keeping up with them could be easier. As a result, you will be less likely to miss payments. Plus, you are less likely to forget to pay them, as we discussed. That also helps to protect your score. With a higher credit score, you may qualify for more competitive financial products in the future.
7. You can pay off your mortgage sooner. When consolidating your debts gives you more financial flexibility, you may find yourself with extra money each month. Instead of putting that toward paying the high interest on other loans, you will be able to put it toward the principal on your mortgage. Over time, you might be surprised by how much those extra payments add up, and how much more quickly you can finish paying off your home loan.

Your Experts in Miami and Beyond

Have more questions about how consolidating your debts could benefit you? Lending Bankers Mortgage can offer you personalized guidance and

At Lending Bankers Mortgage, our goal is not only to help you choose a home loan that fits your needs, but also to guide you throughout your mortgage journey. That means offering you tips to help you be proactive in how you manage your mortgage payments. A lot of homeowners do not do this, and miss out on benefits such as:

• Paying your mortgage off more quickly.
• Saving money on your home loan.
• Managing your overall finances more effectively and affordably.

To help you realize these benefits, here are some tips for how you can get more proactive with managing your mortgage.

Tips When Managing Your Mortgage

1. Start by choosing the right mortgage. You can be proactive in how you handle your home loan before you even sign on it. How? Simply by doing the research necessary to choose the product that will help you maximize your return on investment.During your consultation, we can introduce you to a range of mortgage products, explaining how each could impact your finances. That way, you can choose an ideal home loan.
2. Put mortgage payments on auto pay. The next helpful thing you can do to manage your mortgage payments in a proactive way is to select automatic payments. Missing even a single mortgage payment can be disruptive to your life. Plus, you will lose money through late fees. But with automated payments, you will never need to worry about late fees.
3. Switch to a bi-weekly payment schedule. Do you pay on your mortgage once a month, or plan to do it that way? Here is an idea—try a bi-weekly payment schedule instead. Submit half of what you owe in the middle of the month, and half at the end, and continue that way indefinitely. When you pay this way, you will feel like you are paying the same amount you would be with regular monthly payments. But over the course of a year, you will end up making the equivalent of 13 monthly payments instead of 12. As a result, you will have submitted one extra mortgage payment that year, but you will hardly have had to think of it. If you do this every year, it will add up, helping you to finish paying off your home loan sooner. Should you just make regular monthly payments instead, and then one extra payment per year? If you find this simpler, sure. But for a lot of people, it is psychologically easier to use the bi-weekly payment schedule, since you will not be parting with the extra payment all at once. It could be financially easier too. Plus, depending on your lender, an enrollment fee may be a requirement of switching to paying every two weeks on your mortgage. If that is the situation, it may be worthwhile to just make one extra lump sum payment each year, and/or pay a smaller amount extra each month with your regular monthly amount.
4. Consolidate high interest debts. Do you have high interest debts eating away at your finances? The more money you pour into the interest on those debts, the less you will have available for paying off your mortgage. Instead of passively letting high interest devour your funds, consider consolidating those debts into a loan with lower interest. You might even be able to do this through a mortgage refinance.
5. Find ways to save on monthly expenses, and put those savings toward your mortgage. When was the last time you really dug into the details of your monthly budget to see what you are spending all your money on? If you take the time to do so and research alternatives to what you are doing now (i.e. cheaper cable), you may find ways you can cut back on those expenses. You then have extra money you can put toward your mortgage every month.
6. Refinance if you see interest rates drop. Are interest rates lower now than the rates you are paying? You might feel like this is just a misfortune you have to live with, but that might not be true. Refinancing could be your key to switching to today’s lower home loan rates. That is especially likely if your credit score is better than it was when you signed on your mortgage. So, ask us if refinancing is right for you.
7. Refinance or modify your mortgage if you have changes in your future plans. Decreasing your interest rate is not the only possible way to benefit from a refinance or home loan modification. In fact, you might be able to change your loan term or your interest rate format. So, if your plans for the future have changed, do not just passively ignore the impact on your mortgage. For instance, are you going to be moving in a few years? Have a fixed rate mortgage now? The proactive move may be to refinance to a mortgage with an adjustable rate. You can save money for moving thanks to the introductory rate on an ARM.
8. Ask questions. Finally, our last recommendation is simply this: ask questions, and lots of them. There is no reason to miss out on an opportunity to pay off your mortgage more rapidly or save money because you are missing information. Your mortgage company is here to give you the answers you need to make the right moves in managing your home loan.

Contact Lending Bankers Mortgage Your Mortgage Professionals in Florida

In fact, if you have questions about your mortgage or are looking for more tips for proactively managing your home loan, Lending Bankers Mortgage would love to help. Please give us a call now at (786) 220-1100 to schedule your appointment!

The two most important financial metrics which mortgage companies consider when deciding whether to qualify you for a commercial or residential loan are your credit score and your debt-to-income (DT) ratio.

A high credit score can help to offset issues with your debt-to-income ratio. But if your DTI ratio is particularly high, that can still make it challenging to qualify for a mortgage.

But it does not have to stop you. There are situations where a borrower might have a high DTI ratio, yet still be able to afford to pay on a new home or commercial loan.

The right mortgage company will recognize that reality and offer solutions.

Why Your DTI Ratio Might Not Be Ideal:

• You are just starting out, and your income is not yet at a high level, but you have significant debt. If you are on a solid career track and/or your real estate investments may add directly or indirectly to your income, you may be a viable borrower despite your high DTI ratio.

• You are a real estate investor. The debts on your existing properties might raise your DTI ratio substantially, but not tell the full story of your financial viability.

If you are in a situation like this, there are a couple of approaches which might make it possible for you to qualify for a competitive mortgage despite the high DTI ratio.

1. See if you qualify for a loan with loose DTI ratio requirements. For residential borrowers, there are some programs such as FHA which are aimed in part at those whose DTI ratios may not be as low as would be ideal. Since these types of loans have more relaxed requirements, you might be able to qualify for one even with your higher DTI ratio.
2. Apply for a no ratio loan. Another solution which is applicable to residential and commercial borrowers is what is known as a “no ratio loan.” This is any type of mortgage where you do not need to provide your debt-to-income (DTI) ratio.

Typically, this means that when we talk about no ratio loans, we are referring to stated income loans, also known as bank statement loans.

When you apply for such a loan, you do not need to document your income with pay stubs, tax returns, or W-2 forms.

Other factors are assessed to determine whether you qualify for financing. For example, a lender might look at your credit score, your assets, your financial liquidity, the amount you are willing to put down on a loan, and other factors which help to establish your financial stability and means.

Apply for a No Ratio Loan Through Lending Bankers Mortgage Now

As a residential and commercial lending company in Florida, we are used to doing business with borrowers who invest in real estate and have other nontraditional income situations.

We have qualified many borrowers throughout the state for competitive loans even without ideal DTI ratios.

Whatever your DTI ratio is, we want to help you get the fast and affordable financing you need for your real estate purchase. To schedule your consultation, please give us a call today at (786) 220-1100. We look forward to qualifying you for the most suitable loan.