In the episode I watched tonight you suggested the couple have their debt consolidated into their mortgage. When is this best to do? For only very large debts? We have a line of credit and it would work out to be less a month on our mortgage than we pay in interest. Is this a good way to pay off debt?

This is a tricky question because lots of people use the consolidation tactic to free up money so they can keep shopping. However, if you are serious about debt repayment and are looking for a way to reduce your interest cost and manage your cash flow, then consolidating to your mortgage makes good sense, particularly if you have lots of equity built up. The size of the debt itself isn’t the issue, though I wouldn’t recommend it for amounts under $25,000 since you should be able to pay that off, assuming you can get your interest costs in line.

Here’s the big BUT to using the consolidation strategy… you must be working at paying off the amount you consolidated to your mortgage as soon as possible. Whether you use your anniversary prepayment option to slap a whack of cash into your mortgage once a year, or you find a way to increase your mortgage payments, you need to actively work to pay off the debt.