Credit card debts are debts accrued after cardholders fail to pay off purchases or loans made through the card at the agreed-upon time. In some cases, a cardholder's mortgage can be refinanced to free up cash to pay off this debt.
Features
Eligible homeowners can refinance into a number of different types of mortgages. Some mortgages allow for lower interest rates on the loan, while others reduce the size of monthly payments. Still others, call "cash upfront mortgages," allow the mortgage owner to borrow a sum of money against the value of the home.
Solution
A new mortgage that resulted in lower monthly payments or in the payment of cash to the mortgage holder could allow him enough financial breathing room to pay off his credit card debts. However, he would first have to qualify for such a new mortgage.
Considerations
The terms of the new mortgage available to a homeowner depend greatly on the homeowner's credit rating. If the homeowner faces significant credit card debt, he will likely be considered at greater risk of defaulting on his home loan than another customer, forcing him to pay a higher rate of interest, to offset the borrower for his increased risk.
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