Contour Mortgage News

How to Qualify for Debt Consolidation

Written by Contour Mortgage | Jul 13, 2016 9:00:39 PM

Consolidating your debt through your mortgage can help you get back on track to becoming debt free. But doing this doesn’t make sense for everyone. If you're considering this type of loan, there are certain things a lender will ask you. By keeping these factors in mind, you’ll know just how to qualify for debt consolidation and what you need to do to move forward with a lender.

Your credit plays a role.

Typically when people fall behind on their payments, they start to fall deeper into debt and their credit score suffers. A lender will want to look at your current credit score as well as your entire credit history to see how you’ve been handling your expenses overall.

You’ll need to make enough to pay back the loan.

When you consolidate your debt, you are combining several loans into one. Doing this can help you keep track of your bills more easily because you will be paying only one creditor instead of many.

... they want to know that you’ll be able to pay them back."

But remember that your lender is paying off your debt to those other creditors, so they will want to know that you’ll be able to pay them back too. As a result, your income plays a role in whether you can qualify for debt consolidation.

Your employment history is important.

Lenders may look at how long you’ve been at your current job so they can assess your income stability. If you’ve been working for the same company for several years, you have brought home a consistent amount of revenue and that amount directly relates to your ability to pay back a debt consolidation loan.

You may be asking for too much—or not enough.

Lenders often have limits on how much money they can offer you, so there is a chance that the amount you’re seeking won't fit their parameters.

 

The best way to find out if you qualify for debt consolidation or the steps you need to take to become eligible for it is to contact several lenders.

If you want to learn more about Contour’s customized debt consolidation programs, click here.