Eliminate debt and stress at the same time
Taking control of your finances and reducing debt can greatly reduce stress and provide a sense of financial freedom. If you find yourself overwhelmed with multiple debts, a debt consolidation refinance can help you consolidate your bills and simplify your financial obligations.
Debt consolidation refinance utilizes the equity in your home to pay off high-interest credit cards, car loans, medical bills, and other debts. By qualifying for a debt consolidation refinance, you can combine all your debts into one convenient monthly payment.
The process of refinancing your mortgage involves paying off your current mortgage with a new one that has different terms, such as interest rate, number of payments, and loan balance. With a debt consolidation refinance, you can borrow more than your current mortgage balance to consolidate your other debts into your home loan.
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Benefits of a debt consolidation refinance
Lower Interest Rates: Mortgages typically offer much lower interest rates compared to credit cards and other loans, which often have rates averaging 15%-20%. Lower interest rates on your consolidated debts can free up money that can be used to pay down your debt more effectively.
Tax Benefits: The interest paid on your mortgage may be tax deductible, unlike the interest on credit cards and many other types of loans. It’s important to consult with a tax professional to understand the specific implications for your situation.
Easier Payments: Consolidating your debt through a refinance can also lead to the convenience of having a single monthly payment. By converting multiple bills into one, it becomes easier to manage your finances and keep track of your monthly expenses.
Things to Consider
Closing costs and additional fees: Just like your original home loan a debt consolidation refinance will come with fee and closing costs. It’s essential to ensure that you plan to stay in your home long enough to recoup these costs.
Good debt vs bad debt: Another consideration is that when you consolidate unsecured debt, such as credit card bills, into a secured debt like a mortgage, there is a higher risk involved. Your home acts as collateral, so it’s crucial to make sure you can pay off your mortgage to avoid putting your home at risk.
Home appraisal: During the refinancing process, your home will need to be appraised to determine its value. Factors like the local real estate market and any improvements made to your home since moving in will affect its appraised value.
Refinance Affordability Calculator
Should I refinance and consolidate my bills?
If you’re wondering whether it’s worth refinancing your mortgage, you can use a Refinance Calculator to assess the potential savings. By inputting your current mortgage information, the calculator can compare the total interest paid over the life of your loan with your current interest rate versus a lower interest rate. It will also show your monthly savings and the time it will take to break even. Experimenting with different numbers and scenarios can help you determine if refinancing is beneficial in the long run.
How do I start?
If you believe that consolidating your bills through a mortgage refinance is the right step for you, our team is here to assist you. Our mortgage advisors will guide you through the refinancing process, helping you identify the best mortgage option and how a debt consolidation can help reduce your monthly obligations Taking control of your finances is a good option to pay less interest over time while increasing your cash flow each month.
To explore your refinance options, contact us at 404-238-7888 or fill out our easy, convenient online application, and one of our advisors will contact you to discuss your options.
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