Many homeowners make the choice to refinance their mortgage to consolidate debt (debt consolidation mortgages). Depending on different factors, this can be extremely beneficial.
Although, without the right professional mortgage refinancing guidance, you may steer your most important investment down the wrong path. Debt consolidation strategies have a high failure rate when done without proper counseling.
Have you sought help to get your spending under control through credit counseling? Can you make higher-than-minimum payments on your credit card(s)? Did you consider a zero-interest or low interest balance transfer credit or personal loan as an alternative? If you have tried all of these options and are still struggling, BrightPath is here to help.
Let’s outline how to safely obtain a debt consolidation loan and lower monthly mortgage payments with a private mortgage insurance expert.
CONSOLIDATE DEBT WITH MORTGAGE
Cash-out Refinance
- Use your home equity (mortgage you have paid off) to generate a “cash out” plan.
- Your mortgage balance will be increased to provide the cash.
- This can be used towards for a variety of needs. For example, home improvements, a down payment on a second home, paying off student loans and medical bills are common.
- This plan leaves you with only your mortgage debt to pay off.
- Eligibility varies depending on your current mortgage loan and the type of cash-out refinance you apply for.
If your mortgage doesn’t have a lower interest rate compared to your credit card accounts, you need to restructure your plan. Contact a refinance mortgage to consolidate debt expert now.
Rate and Term Refinance
- Allows for the terms of your current loan(s) to be changed and replaced with conditions that will help the homeowner(s) pay off debt.
- Offers more or less time to pay off your loan at a lower interest rate or a different monthly payment.
Streamline Refinance
- This is the same plan as a rate and term refinance, but is specific to FHA loan mortgages.
- Offers a lower interest rate or a different monthly payment.
REFINANCING MORTGAGE PROS
- Current mortgage interest rates are at nationwide lows.
- Lower high-interest debt (priority debt) from unsecured borrowing sources (credit cards and personal loans).
- Debt consolidation pays off your high-interest debt with one, lower-interest loan to save on interest payments.
- Allows you to save money through lowering the interest rate on outstanding debts.
- Can improve your credit score by lowering the percentage of your total credit limit that you’re using.
- Mortgage interest can be tax-deductible.
REFINANCING MORTGAGE CONS
- Closing costs are a part of refinancing, as original mortgages have
- Be careful with paying off high-interest credit cards with a low-rate mortgage refinance. It is best to speak with a mortgage expert before doing this.
- Using home equity to pay off credit cards may drive you to use up your credit limit again. Don’t create an even worse financial situation than before.
- Debt consolidation refinance can be an excellent way to pay down debts with a lower interest rate. Yet, it requires a high level of discipline in making payments.
REFINANCE MORTGAGE, CONSOLIDATE DEBT NOW
Remember, refinancing your mortgage may not be the right choice for very homeowner. If you want to consolidate debt using a mortgage refinance, you have to qualify for the new loan.
Here at BrightPath, we understand the importance of paying off debt. Is it not the right time for you to refinance mortgage to consolidate debt? Ask a mortgage expert about a home equity loan or home equity line of credit to get lower interest by securing your debts against your home.
Whatever your plan is to pay off debt, BrightPath is here for you. Contact us now to redirect your path to financial freedom.
