A ,000 credit card balance at 16 percent interest plus a 0,000 mortgage at 4.5 percent interest rack up 0,936 in interest payments over the life of the loans.
Consolidating the two into a new, 30-year mortgage at 4.5 percent saves about ,642 in interest.
Think of the equity in your home as a sacred savings account: You can tap into it but only when truly needed, says Rick Harper, director of housing and senior vice president for the Consumer Credit Counseling Service of San Francisco.
The purchase price for the loans is 99 percent of the outstanding balance and accrued interest, Discover said.
The deal follows Discover’s agreement in September 2010 to buy Citi’s 80 percent stake in Student Loan Corp for $600 million.
New customers are individuals who do not fall in the above category of existing customers.
In the event there is an excess payment to your facilities with the other financial institution resulting from your approved Citibank Debt Consolidation application, you are solely responsible to request for a refund from the respective financial institution.
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You may be tempted to consolidate your credit card and other high-interest debt into a mortgage with much lower payments. Lenders now require the homeowner to keep at least 15 percent to 20 percent equity after cashing out.
Consolidating the two into a 15-year mortgage at 4.5 percent saves almost 0,000 more.
Those with enough equity in their homes have been able to substantially reduce the monthly payments on credit card debt, student loans and personal loans, says Michael Moskowitz, president of Equity Now, a mortgage bank in New York City.
Today’s debt consolidation mortgages are more conservative than those seen during the housing boom, when lenders allowed homeowners to refinance and cash out as much as 110 percent of the value of their homes.