Refinancing Your Mortgage is NOT debt elimination

What do I hear a lot? I'm going to refinance my mortgage and pay off my credit card debt, which will lower my payments. (Listening to a mortgage broker who is going to make a huge commission when you do this is dangerous!)



What you are really doing: Moving unsecured debt to secured debt-against your most important asset-your house. Now, if you can't make a payment, they can foreclose on the roof over your head.



You did NOT eliminate any debt, you have just restructured it and if you restructed it into a new 30-year mortgage, you will be paying off that same debt over the next 30 years. It might be at a lower interest rate, but you need to study your loan ammortization schedule and see what this new 30-year plan costs you. That mortgage broker may not be your friend - remember, his/her first interest is padding his/her pocket.



Your least cost option? Submit the debt to arbitration, eliminate it with no interest cost over the next 18-39 months.



Also, talk to us about how you can use a MMA to eliminate your mortgage in half the normal time.

Reduce Your Debt to Income Ratio to Improve Your Credit Score

Your Debt to Income Ratio is your total debt divided by your income. If your total debt is $40,000 and your income is $40,000, your debt to income ratio is 100%, meaning it takes a full year's worth of income to pay off your debt.

If you have a mortgage of $120,000, you have added 3 more years of income or 300% to the ratio.

Most people do not realize that your debt to income ratio has a heavy effect on your credit score, even more than on-time payments. Paying off debts has a very positive effect on your credit score.

Clients in our program are getting completely out of their unsecured debt load in 18-39 months and seeing much higher credit scores as a result. Get on our MMA Mortgage Reduction program as well, and see your score go much higher in just a few years. The mortgage reduction program can been seen at: http://www.u1stfinancial.net/achieveunlimited

Why is this the case? Logically, if someone has debt which will take years to repay, they are at much higher risk of a negative life event: loss of job, disability, etc., and a higher credit risk.