You might think that being in debt closes the door to future loans, but that's not true at all. Debt consolidation mortgage refinancing is actually quite commonplace; many consumers carry debt on multiple credit cards and from other sources, and look to refinance their mortgage in order to consolidate all those debts into one monthly payment.
Second mortgages can be either in the form of a home equity loan or line of credit. Both are good debt consolidation strategies for a variety of reasons. Most have lower rates; while the majority of credit cards have double-digit interest rates, second mortgages have much lower interest. One of the best things about refinancing is that it can knock hundreds of dollars off the payment made each month.
A home equity line of credit can provide you with the flexibility needed to pay your other loans, because it works in much the same way a credit card does. Though it is flexible, a home equity line of credit's rate is linked to that of the financial market; a rise in the prime rate could quickly result in a higher monthly payment.
The interest paid on a second mortgage will likely be tax-deductible as well. When you add in what you save on taxes, it's even more motivation to refinance your mortgage and pay off your other loans. Fixed rate HELOCs may provide greater stability but you won't be able to tap into it anytime you need it. The above reasons are ample proof that refinancing your mortgage is possible when you have other loans, and doing so can quickly bring down your debt. If you are in debt, gather your bills and get to a professional lender. A refinance could help you get back into good financial shape.