There are many reasons why a homeowner might choose to refinance his or her mortgage. One of them is to consolidate high-interest debt.
Consolidating your debt by refinancing with a low mortgage rate can help you get a better handle on your finances, and it can save you a lot of money over time. The question is: how do you start this process?
Consolidating Debt, Refinancing Your Mortgage
The short answer? Contact the team at Loan Fleet, and we’ll be happy to talk with you about your financial needs and the potential merits of refinancing. Here’s how the basic process works:
-By refinancing, and taking advantage of historically low rates, you can get cash to pay off some of your more troublesome, high-interest debts.
-Consolidation let’s you make one monthly payment as opposed to several, and that payment may be much lower than what you’re paying right now. Another benefit is that mortgage interest, unlike credit card interest, is probably going to be tax deductible.
-Paying off your high-interest debts will actually help you improve your overall credit score!
-If you have two mortgages, you can roll them into one, and be left with just one low monthly payment instead of two larger ones.
How Refinancing Works
Remember that the average interest rate for credit card debt is around fifteen percent—but the interest rate for a mortgage loan is currently under the four percent mark. Assuming that you have some equity in your home—that is, the current value of your home is greater than your mortgage balance—you can refinance the mortgage, receive cash at a low interest rate, and use that cash to make good on those credit card debts.
Now, it’s important to note that refinancing is not for everyone. You need to have equity in your home, and you also need some cash on hand to pay closing costs for the refinancing (though it is possible to finance the closing costs themselves, which can sometimes work out well). To learn whether or not you are a good candidate, we encourage you to contact us.
Loan Fleet has helped countless homeowners save money and pay off debts through consolidation and refinancing, and we’d love to help you, too. Contact Loan Fleet today to start the conversation!