Consolidating your Mortgage and other Debts
Before you start making extra payments it is a good idea to look at your financial situation or get the help of a financial adviser. If you have other debts with high rates such as credit cards it may be better toworthwhileconsolidatinge the debt that is expensive. Don't be tempted to use the savings from consolidation to borrow more good debt though.
The following is an example of where this might be appropriate:
| Description | Loan Value | Monthly Repayments |
| home loan | $500,000 | $4,023 |
| credit card | $5,000 | $500 |
| car loan | $15,000 | $290 |
| Total | $4,974 |
Consolidating loans into the home loan so the amount is $520,000. Monthly repayments would be reduced from $4,974 to $4,184, saving you $790 per month.
Now this is the real bonus: If these freed up funds were applied to the home loan as extra monthly repayments then they would translate to interest savings of $485,880, or the equivalent of $908,185 income earned in your pocket, This would also take off 12 years and 10 months off the loan.
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