lowrate.com

Some people often take out a second mortgage on their home because they need a lot of money for a major expense – like a home addition or repairs.

These types of loans can be a useful source of funds, but homeowners who borrow against their home’s equity are putting their property on the line and are at a greater risk for foreclosure. However, Don Taylor wrote on financial website Bankrate.com that a homeowner who is caught between two mortgages and is building up a huge credit card balance can find financial stability.

Often, a person might be making just enough money to pay off their mortgages but not enough to significantly reduce their credit card debt. In that scenario, Taylor advised either consolidating all three debts or just the two mortgages into one 15-year loan.

Both methods take discipline and folding credit card debt into a mortgage isn’t always the right answer, he explained. Ultimately, the idea is to free up money every month to pay down one’s debt.

If they have extra money available, homeowners are often advised to pay more than the minimum on their mortgage to reduce the loan term and interest paid.