When you have equity in your home, refinancing might help you get cash out to consolidate your debts and save money on your monthly payments. We have listed what you need to know about refinancing and debt consolidation:What is debt consolidation?
When you consolidate debt, you use money from a new loan to pay off debts from other sources like credit cards, student loans, vehicle loans, or any debt you have. Consolidating lets you make one payment to one lender, which makes bills easier to manage.
Is debt consolidation a good idea?
Consolidation can be a good idea when the interest rate on your new loan is significantly lower than the rate on your current debts. One goal of debt consolidation is to reduce how much money you pay to higher interest loans over time.
What is a cash-out refinance?
A cash-out refinance replaces your current mortgage with a new mortgage for a higher amount. The interest rate and term will likely be different on your new mortgage. And the amount you owe will increase since you are rolling additional debt into your mortgage balance.
If you think that debt consolidation by refinancing your mortgage would be something you like to do, schedule a consultation with us. We can help you figure out if this option is right for you in your particular situation.
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