The first time you should think about this is when you’re changing your home. Let’s say you are trading down. You have a good equity in the house being sold and the amount you’re paying for the new home will leave that equity largely untouched. Consolidating your existing personal debts into the mortgage loan can work well. You pay off all your other debts out of the sale price and free more of your income with the reduced repayments. Alternatively, you have an equity in your existing home and decide either to refinance your existing mortgage to include personal debts or you take out a second mortgage.

You need to use a mortgage calculator to see whether this makes commercial sense. It depends on exactly how much interest you’re saving, the length of time you expect to stay in the house and whether you are expecting the value of the house to appreciate. Then there are the tax implications and the extent to which other costs may rise, e.g. the mortgage insurance premiums.

Even more important if the calculation shows that the consolidation is favorable is what you will do with the amount saved every month. The best possible strategy would be to use every cent of the savings to accelerate repayment of the mortgage. The first worst strategy would be to treat this a free money to spend as if there’s no tomorrow. The absolute worse strategy would be to take on more personal debt. The thinking goes: house prices always go up sooner or later. When that happens, I can do another debt consolidation and write off all this new debt with another cash out. When you’re in a collapsing property bubble, this is a very bad idea.

That gives us two different scenarios. Younger owners may decide they want to cash in the rising capital value of their home with an equity loan or line of credit. This gives them immediate spending money. A “cash out” loan can be secured as a second mortgage or the line of credit can be charged on the equity. Alternatively, the motivation for the loan may be to finance some big ticket item like home improvements. All these options work well so long as the resale prices keep rising, but the plan creates problems if house prices fall because now you’re in negative housing equity territory, i.e. you owe more than your home is worth. Worse, there are few buyer out there willing to pay your asking price.

The second scenario is slightly different. This sees the house as savings. A couple might maximize payment of the mortgage so that, when their children are ready to go to college, they can refinance to pay their tuition fees. This would be an alternative to an endowment insurance package. Or a couple might sit on their home as an asset until they are ready to retire. Then they cash out the equity and buy an annuity. This gives them income to supplement the pension and gives them a comfortable retirement.

Whichever the scenario, both groups need to ensure that they get the best deals. Using a site this gives you maximum access to the lenders with available funds. Comparing the quotes gives you the best chance of find a deal that will suit your needs.

Let’s take an example of your life as a story of success. When you first took out your mortgage, you had a poor paying job. But that’s all changed. To make the instalments affordable, you went for a long term, say, thirty years. Now you could pay off the loan in half the time. So how do you make this work? First, you have to be able to afford significantly higher monthly repayments. Secondly, what is affordable now must still be affordable in one or two years. Are you sufficiently certain that your circumstances are going to stay successful? Look around. There may be a recession coming. You will pay fees to change the term of the loan. There will be more fees payable if you can’t keep up the new instalments and want to revert to the longer term. Paying off the loan faster is wise only so long as you achieve it.

The other increasingly common reason for renegotiation is to avoid a mortgage adjustment. During the last few years of the housing bubble, many buyers were sold on an adjustable rate mortgage. The idea is simple. You have a low starting interest rate but, at the end of the “holiday” period, the rate is reset or adjusted to a higher rate. All these contracts have a fixed period so everyone knows when the higher rate will hit, but not everyone knows what the new rate will be. Most contracts use the prevailing rate on a particular day + an agreed mark-up. That way, you gamble that the rates are not going to rise significantly over the holiday period. But the plan was sold on the expectation that all house prices would keep on rising. If the new mortgage rate was going to be too high, homeowners could sell to realize their capital gain and buy another home on an adjustable rate mortgage. Except the bubble has burst and house prices are dropping so owners are caught with no capital gain and increasing monthly instalments.

Whichever side of the coin you find yourself on, money is available in the lending market to help you get what you want. All you need is access to multiple lenders to get the best terms. That’s what you get when you use sites like this.

Perhaps you bought your home when the interest rates were high and you were locked into that higher rate. Even though the Fed kept dropping the rates over the last few years, you never saw any savings. Or perhaps it’s the other way round. The reason you were locked into a higher rate of interest was a poor credit score. Now you’ve been paying that mortgage for all these years without a problem, your credit score has improved. Finally, you’re able to qualify for lower mortgage rates.

Except that life is never quite that simple. It’s all about balancing costs and benefits. Sure, you might be able to save a few dollars every month if you refinance. But how much will you have to pay as origination fees and charges for this deal? When you get quotes for refinancing, don’t focus on the monthly instalments, look at those costs. Just as important, ask your current mortgage lender about closing costs. Don’t forget, the plan is to pay off the existing mortgage with a new loan. You need to use a mortgage refinance calculator to work out how many months on reduced payments it’s going to take before you’re ahead of the game again. It might be better to stay on the current mortgage. Most of the experts agree you should be looking for at least two full percentage points of reduction in the interest rates before it’s worth your while to go ahead on the deal. You also need tax advice because closing costs are not deductible but there may be tax savings on the new loan.

Whilst the headlines now seem to be spelling out doom and gloom for the economy, the most powerful effect is at the top of the system. The big companies that have been trading in weird forms of investment have lost their way. They have been overvaluing their assets and this will cost them dear. Some of this will trickle down but basic trade has to go on. Life does not stop just because a few companies fail.

So what might you need? Let’s start with the obvious. You took out a mortgage with a low introductory interest rate and a higher rate is about to kick in. It may make sense to renegotiate the terms or find another company prepared to take over the mortgage at a lower rate. Or you might have been looking at your debts. Often people find they have several credit and store cards, an auto and other smaller loans. This collection of debts with different lenders often carries high rates of interest. Worse, if you miss a payment, you can get hit with all types of penalty charges and what was a perfectly manageable liability suddenly becomes a problem. The best answer is to put a debt consolidation package together that rolls up all your liabilities into a single large loan spread over a longer period of time. This gives you a lower monthly instalment and more flexibility to plan for the future. Despite the fall in house prices, you may still have an equity in your home which can either be released to give you needed cash, or it can be used a security for a second mortgage.

Is it going to be easy? Not necessarily. But if you sit on your hands and do nothing, you will never find out whether you can do what’s needed. Take the first step to explore what is actually available by contacting the loan companies through this site. Only the ones with cash to lend will respond. That will start you off in the right direction.