Life can be extremely stressful when you have a lot of debt. You may be working two jobs and have cut every possible expense, yet you still struggle. There simply are not enough hours in a day to work more and you would have to go without necessities if you tried to reduce any more expenses. The frustration and stress of this situation can get so bad that it affects your health and relationships. Fortunately, Atlanta mortgage refinance company, BrightPath, offers a simple option for you when refinancing your home to pay off debt.
How Refinancing a Home to Pay Off Debt Works
To qualify for a refinancing loan, you must have built up equity in your home. The term “equity” means that you owe less than the value of your home. For example, assume that you started with a $200,000 Atlanta mortgage. You have paid $100,000 of that over several years, and the last assessment you received valued your home at $150,000. When you take out a refinancing loan, you would pay the balance of your existing mortgage and use the remainder to pay off your debts. You would then only need to make monthly payments on your home refinance loan.
Atlanta Mortgage Refinance: Why It Makes Sense to Refinance Home to Pay Off Debt
The most compelling reason to refinance your home to pay off debt is that Atlanta mortgage loans have a much lower interest rate than most consumer credit cards and other installment loans. The typical annual percentage rate on a credit card is 18 percent, which can jump to close to 30 percent when you make even one late payment. You also have late payment penalties to consider. In contrast, a mortgage refinance loan usually has an interest rate in the single digits. This adds up to considerable savings over the course of a year.
Refinancing your mortgage to consolidate debt simplifies your life because you only need to make one payment. You no longer need to juggle your mortgage payment and several credit cards because everything is rolled into one. The reduced fees and single payment can help you get out of debt much faster than you would have otherwise. It can even help you avoid bankruptcy.
Atlanta Mortgage Options for Refinancing a Home to Pay Off Debt
As a BrightPath customer, you have several options to refinance a home to pay off debt. Loans through the Federal Housing Administration (FHA) are a popular option. Lenders are more inclined to approve applicants for this type of loan since it comes backed by the FHA. However, you could end up paying higher interest overall, so it’s important to talk to a mortgage broker in Atlanta to cover all of your options when it comes to refinancing your home to pay off debt.
A 15-year loan can help you pay off your mortgage and other debt as quickly as possible if you are able to afford a larger monthly payment. A 30-year loan is more appropriate if you would like smaller payments and a longer time to pay. Of course, you will pay more interest on the 30-year loan assuming that you do not pay it early. If you do not wish to take out another mortgage, consider a home equity line of credit.
The mortgage broker in Atlanta staff at BrightPath wants to see you get out of debt and not deal with so much stress in your life. Please contact us today to learn more about how to refinance your home to pay off debt and enjoy a life of lower interest payments and little to no debt!
