Real Estate News, Reviews and Investment
Article: what consolidating your loans involves and its advantages and disadvantages.
Rather than holding several debts with different lenders, it is possible to consolidate them into one loan. This is done by taking out a larger loan and using it to pay off the other debts.
The goal with consolidating a number of debts is to reduce interest rates and loan repayments, making the debt more manageable and cheaper.
Consolidation is usually done by moving unsecured debt, such as credit card debt, to secured loans, such as mortgages, as secured loans have lower interest rates.
While there are many companies that offer to consolidate loans, they often charge high fees and focus on the consumer debt market rather than working with investors. Consolidating debt requires no special expertise – it’s simply the practice of reducing the number of debts a borrower has by increasing the value of one particular debt.
Why would a real-estate investor consolidate loans?
Real-estate investors will often have several properties in their portfolio, each with separate needs and outstanding mortgages. Common reasons to consolidate include:
Advantages of consolidating loans
Disadvantages of consolidating loans