If you are currently struggling to manage your debt, know that you are not alone. According to a study conducted by The Pew Charitable Trusts, eighty percent of Americans have some form of debt. And while this can range from credit card bills to student loan payments, the most common debt is tied to mortgages. Depending on when you purchased your home and your specific circumstances, you may have taken on a higher interest rate to secure the loan to purchase your property. But if you now feel that the amount you pay is too high, there is a solution. By refinancing your mortgage to consolidate debt, you can lower your interest rate and pay debt off faster to start enjoying a care-free life. The loan experts at BrightPath will use their unparalleled knowledge of the industry to help you refinance your mortgage to consolidate debt.
How Refinancing Your Mortgage to Consolidate Debt Can Help
If you currently have equity in your home, you can refinance your mortgage to consolidate debt. By doing this, you not only lower your interest rate, but you consolidate this debt into a singular payment, which both simplifies your life and reduces the risk of having to pay fees associated with multiple accounts. While there are many circumstances in which refinancing your mortgage is the appropriate course of action, the main reason to do it is to reduce expensive mortgage payments
How to Determine if Your Mortgage Payment is Too High
When you purchased your home, you may have gotten locked into loan terms that were not favorable to your financial situation. If you suspect this is happened to you, refinancing your mortgage to consolidate debt can help. See below to determine if your mortgage payments are too high.
- Higher interest rates. Depending on when you bought your property, you may be paying a higher interest rate than what is currently available. Research rates to determine if refinancing can lower your interest rate.
- Your payment is above thirty percent of your earnings. If your housing payments are more than thirty percent of your income, it could be negatively affecting your ability to save and make other necessary payments. Refinancing can help you save more money over time that can be used to invest in your future.
- You have received a pay raise. When determining mortgage payments, your income is usually a factor in calculating interest rates. If you’ve been promoted since you purchased your property, you may be able to use refinancing to negotiate a shorter loan term or lower your interest rate.
- Your loan principle won’t When you take out a loan to purchase a home, the loan principle should decrease over time as you make your mortgage payments. But if it continues to stay the same or diminish at a snail’s pace, it’s possible a high interest rate is preventing you from paying it down.
- You are paying for private mortgage insurance. You likely pay for private mortgage insurance if you put less than twenty percent down when you purchased your property. This cost can significantly add up over time. Refinancing your mortgage can help you pay this off faster and meet the necessary requirements to abolish this payment altogether.
- You’ve improved your credit score. Credit scores always play a major role in determining interest rates. If you had a lower credit score when you purchased your home, you likely have a higher interest rate. If your score has improved since then, refinancing can help you negotiate a lower interest rate.
- Adjustable rate mortgage adjustments. You may have agreed to an adjustable rate mortgage in order to buy your property. However, these interest rates often fluctuate and increase over time, which can cause a sharp rise in your loan payment, potentially beyond what you can afford. Refinancing gives you the opportunity to switch to a reliable fixed rate mortgage, which usually has lower interest rates.
- You are struggling financially. If you are unable to meet your mortgage payments or have little left over after you do, it can take a major toll on your well-being. Consider refinancing your mortgage to help ease this tension.
Work with BrightPath to Refinance Your Mortgage to Consolidate Debt
If you have determined that your mortgage payments are too expensive, it is time to refinance your mortgage to consolidate debt. Contact BrightPath today for a free consultation to find the perfect mortgage that fits your budget and your needs.
At BrightPath, we find brilliant mortgage solutions that support your long-term goals.
