When you struggle with debt, it does not just affect you financially. It can create lingering anxiety that takes a toll on your emotional and physical health. And while it may seem like there is nowhere left to turn, there is a solution that can help. By working with mortgage companies in Texas to refinance a mortgage to consolidate debt, you can regain control of your bank account and get back to living the life you deserve.
At BrightPath, we will work hard to get you the refinancing you need so you can get on the path to a better tomorrow.
What Happens When You Refinance a Mortgage to Consolidate Debt?
According to mortgage companies in Texas, when you refinance, you can use the current value of your home to renegotiate your loan terms. This will not only lower your interest rate but also allows you to consolidate your debt into a single monthly payment. This makes it simpler and faster for you to resolve your debt because more of your payment will go towards lowering the debt principal instead of just paying off the interest.
When You Should Refinance
Mortgage companies in Texas will advise you to refinance under the following circumstances.
- To reduce your interest rate. Depending on when you purchased your house, you may be stuck paying a higher interest rate than what is currently available. If the rates have lowered, refinance a mortgage to consolidate debt so you can reduce your interest payments.
- If you have equity in your home. When you refinance a mortgage to consolidate debt, you borrow more than you owe so you can use a portion of the new loan to pay off debt. If the value of your home is higher than what you owe on your existing loan, then mortgage companies in Texas will recommend you refinance.
- To eliminate future debt. You must make a financial plan that eliminates taking on any new loans when you refinance a mortgage to consolidate debt. If you take on additional loans or start using credit cards again, you could harm your chances of getting out of debt faster.
Preparing to Refinance a Mortgage to Consolidate Debt
If are interested in refinancing a mortgage to pay off debt, mortgage companies in Texas will encourage you to make the following preparations to ensure you are ready and receive the best rates.
- Collect appropriate documents. Rates can be fickle and rise or fall at a moment’s notice. As a result, you want to ensure you have your paperwork ready when the time comes to file your application. While the required documentation may differ based on the type of loan you apply for, mortgage companies in Texas advise that you be prepared to provide proof of income statements, tax returns, and bank statements.
- Review different mortgage types. When you refinance a mortgage to consolidate debt, there are a variety of loan options available including FHA loans, VA loans, cash-out refinance loans, 15 year-, and 30-year fixed rate mortgages. While each has its advantages and eligibility rules, you should conduct research to determine which option will be the best fit for you. Be sure to consider points, APR, closing costs, and other related fees before making a final selection.
- Enhance your credit score and profile. Although it may be challenging, try to improve your credit score and profile before you refinance a mortgage to consolidate debt. While certain loan types will approve you with a score as low as 620, your refinance rate will be higher than if you have a credit score of 700 or more.
Seek the Debt Relief Solutions You Need with BrightPath
While it may seem hopeless, the professionals at BrightPath will be by your side to ensure you receive the debt relief you need. By using their specialized skills and unparalleled industry knowledge, they will help you refinance a mortgage to consolidate debt so can retain your financial freedom.
Contact us today to schedule a consultation.
At BrightPath, we will zealously advocate for you so you can live a debt-free life.