The Top 3 Pitfalls of Refinancing Your House to Pay Off Your Credit Cards (veezq-29942)

The interest rates on your cards are bad, but there are things you should consider before refinancing your home to pay them off.

Some people believe that when you have huge amounts of credit card debt, refinancing their home is a perfect solution it all off. Why not? That would relieve some of your interest rates and a whole lot of your stress, and you are already paying on your mortgage anyway, so what could it hurt?

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But think about it. Is it really a good idea to put more debt into your home? In the long run, it's really not too great of a deal.

The top three pitfalls of refinancing your house to pay off your credit cards may shed a little light on the subject, and it just might change your mind.

Transferring your credit card debt over to your home loan can be high risk of greater loss. For example, if you fail to pay off your credit card debt, the worst thing that can happen to you is you lose your good name in credit, you file for bankruptcy, your credit score goes down, and you basically have an extremely low chance of ever getting anything on credit for a really long time.

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Sure, that's pretty harsh, but think about your mortgage. If you fail to pay your home loan, you are not only putting your credit at risk, but you also run the possibility of losing your home.

You already have to pay enough interest on your house as it is. In fact, the first several thousand dollars you spend when you begin to pay for your home is wholly dedicated to paying off the interest.

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It is not until later that you even begin to pay on the principle. Having this much interest to pay over such a long period of time, may actually extend the time it takes you to pay for your home.

If you refinance your home so that you can pay off your credit cards, it takes a lot longer to pay off your home. Having a home loan is a long and drawn out process as it is.

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If you add your credit card debt to the debt that you owe on your home, this will increase the amount, and the time it takes to pay that amount off. Sometimes, depending on how much credit card and/or mortgage debt you have, you could end up paying off your loan for the rest of your life... or perhaps your debt could even spill over to a burden your children or successors will have to carry.

Whether or not it's best for you to refinance your home to pay off your credit cards is completely up to you. The best thing you can do to help you decide is to know the factors that come along with it. If you know you can successfully pay for your refinanced home, and that you can save money doing it, go for it.