Real Estate Terms Dictionary
Mortgage and Consolidation
Definition of 'Mortgage and Consolidation'
Consolidating debt through a new mortgage is one way of refinancing an existing loan.
What does Debt Consolidation Mortgage mean:
The debt consolidating mortgage can be seen as an advantageous option when looking to refinance an existing mortgage especially in the following situations:
converting from an adjustable-rate mortgage to a fixed-rate one, obtaining a lower interest rate, reducing the term of the master mortgage, or building equity in your home more quickly.
On the other hand, there are also several drawbacks to refinancing an existing loan. The main disadvantages are that it can make borrowers enter never-ending debt and that it can take time to gain back the refinancing costs (usually approx.3%-5%).
Here's a real-life example from one of the properties researched on PropertyShark:
The glossary is intended to provide real estate professionals and home buyers with a basic understanding of various specialized terms related to legal rights over a property. All terms appear in public records such as ACRIS. We do not take responsibility for the legal accuracy of the definitions provided and ask that use of these explanations in a legal setting be made only after checking with a lawyer or another specialist in the field.