Mortgages are a little different than debt consolidation. Usually you obtain a mortgage for the purchase price of a home in order to have a steady place to live as well as make equity. When you have begun to pay off the original mortgage you will have equity in the home. The equity is determined by the value of the home minus what you owe on the mortgage.

When you do a mortgage refinance and debt consolidation you are actually going to use the equity you have built up in the house. Keep in mind that you can only obtain a 100% of the home’s value in most cases. If your credit is excellent and you are in a good financial position at the moment a lender may be will to offer 125% of the loan to value. In other words you may be able to get 25% more. This is usually a bad idea because it will raise the interest rate, due to the 25% being unsecured and therefore raise the monthly rate.

What you really want to do is make sure a mortgage refinance and debt consolidation offers you the best financial option available. You may not be able to pay off all of the credit cards, other personal loans, or other debt that you have through the equity, but if you can get a lower combined monthly payment in one payment amount, with a lower interest rate you are going to be saving a little more a month. As an example say you have three loans, and two credit cards. If you look at them separately you are paying 5%, 6%, 12%, 25%, and 31%. When you combine the percent you are paying it adds up to more than any mortgage refinance and debt consolidation loan you could get.