How to Add Credit Card Debt to a Mortgage

Adding credit card debt to your mortgage carries two advantages. The interest rate for most mortgages, even second mortgages and home equity loans, is lower than those for credit cards--often significantly lower. Also, mortgages are amortized over decades rather than just a few years. The combination of these factors makes your monthly debt payment significantly lower than making the minimum payments on the same debt on a credit card.

Instructions

1

Confirm that you have sufficient equity in your home to pay off your credit card bills. Your equity is how much more your house is worth than you owe on it. For example, the equity on a $250,000 home on which you owe $200,000 is $50,000. Subtract about 10 percent from your equity to account for the fees that will accrue as you finalize the loan.

2

Get approved for a new mortgage. If you can't get a replacement mortgage, you can achieve similar effects with a home equity loan or line of credit.

3

Wait to receive funding on the loan. This will appear as a lump sum in an account you designate. You should choose an easily liquidated account, such as a checking account, for this purpose. In general, the sum you will receive will be for the money left over after your original mortgage is paid off, minus fees and commissions.

4

Use the money from your new mortgage to pay off your credit card debt.