Debt consolidating home mortgages
This calculator will help you to determine whether or not consolidating will actually reduce the cost of retiring your debts.Starting with the first line of entry fields, enter each of your obligations, along with their corresponding principal balances, APR and monthly payment amounts (the last two columns are automatically filled in by the calculator).Cancellation of second mortgages and refinances taken out in excess of the amount owed at the time of application do not qualify for tax-exempt status in most cases.Only the amount of the debt forgiven which homeowners used specifically for home improvements is tax-exempt.Borrowers receiving debt forgiveness must obtain a detailed summary from the lender.Using Form 1099-C, the lender reports the amount of debt canceled as well as the value of the property at the time of the cancellation of the debt.
The law relieves homeowners from further financial burden following financial hardship and a drop in housing prices.
Then compare refinancing to this type of mortgage loan against other options for debt consolidation, like a personal loan.
Throughout the process, it’s important to remember that debt consolidation doesn’t lower your overall amount of debt – it simply rolls all loan balances up into a single loan.
Borrowers who claim that second mortgages or lines of credit are exempt need to provide receipts that prove the money went to home repairs and improvements.
Even though the law does not cover loans taken out in excess of the amount owed at the time of refinance, bankrupt or insolvent homeowners receive tax exemption from the debt cancellation.