If you feel like you are drowning under student loans and credit cards bills that keep piling up, you may be considering refinancing your mortgage to pay off debt as one of the many mortgage options in Dallas. But with so many loan options available with different rates, fees, and qualification requirements, you may have trouble discerning which mortgage option will be the best choice for you. With the assistance of mortgage companies in Texas, you will get the guidance and insights you need to find the right refinance to help you resolve your debt.
At BrightPath, we make it simple to find the best refinancing to meet your needs and set you up for future success.
The Benefits of Refinancing Your Home to Pay Off Debt
According to mortgage companies in Texas, refinancing your home to pay off debt is beneficial in most circumstances because it allows you to lower your interest rates. When you struggle with debts like student loans and credit cards bills, they tend to have higher interest rates than those associated with mortgages. So, by refinancing your home to pay off debt, you can resolve your dues faster with the reduced interest payments. And when you refinance, all your loans are rolled into one monthly payment. This is great for keeping you on track so you will not incur late fees or penalties for missed payments.
Mortgage Options in Dallas for Refinancing Your Home to Pay off Debt
One of the most challenging aspects of refinancing your home to pay off debt is selecting the best mortgage option to meet your unique needs. That is why mortgage companies in Texas will help you review different loan options to determine which will work best for your specific situation and long-term goals.
- Cash-out refinance loans. When you cash out on a refinance, you can utilize the value of your home to receive a new loan amount that is higher than your current mortgage. The difference is given to you in cash that can be used to consolidate your debt. This also helps you to enhance your credit score and debt-to-income ratio so you can rebuild strengthen your finances.
- Home equity loans. A home equity loan allows you to use the current value of your property to receive a fixed loan amount with a lower interest rate and single monthly payments. However, with a home equity loan, your house becomes collateral. So, if you default on the payments, you are at risk of foreclosure. As a result, mortgage companies in Texas will only advise you to get this loan if you are certain you can make your new payments in full and on time.
- FHA loans. Insured by the Federal Housing Administration, FHA loans are a great option for refinancing your home to pay off debt. With easier qualification and approval standards, they are highly favored by mortgage companies in Texas. And since they are backed by the government and pose less of a risk to the lender, you are likely to receive better rates and financial relief if you are experiencing fiscal hardship. It is important to note that many FHA loans do come with a higher interest rate, so you want to talk with your mortgage specialist to make sure which option is the right one for you.
- VA home loans. Designated for military personnel and veterans, Veteran Administration (VA) loans are an excellent choice for refinancing your home to pay off debt if you are eligible. With special low to no down payment programs that waive mortgage insurance, they allow former service members to easily consolidate their debt with fixed, low interest rates.
Explore Your Refinance Options with BrightPath
As one of the premier mortgage companies in Texas, the experts at BrightPath will provide you with the detailed information you need about each mortgage type. By walking you through every potential option, you are guaranteed to feel confident in your selection when refinancing your mortgage to consolidate debt.
Contact us today to schedule a consultation.
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