Consolidate Your Debt with a Mortgage
A lot of homeowners who want to consolidate their debts will do so by refinancing their homes. There are many options that are available to you, so it's important to speak with our Atlanta mortgage lender team to see if consolidating debt with a mortgage is viable for your situation. Refinancing your mortgage can save you thousands of dollars from in interest rates, especially when you are paying off your higher interest rate credit cards, which can take longer to pay off and cost you even more over time. Clearing the balance of one credit card means you have that extra money each month to put towards the things you want.
When you refinance your mortgage, you are tapping into the equity in your home. Using this to consolidate your debts means, rather than paying several bills each month, you are just paying one lower payment in regards to interest rates. Debt consolidation has quite a few benefits.
Lower Fixed-Interest Rates
As mentioned earlier, when you choose to refinance your mortgage, your interest rates are significantly lower in comparison to the interest rates of a credit card. While you will end up owing more on the refinanced mortgage over time, the lower interest rate you get will help to free up funds that you can put back into your refinanced mortgage to pay it off quicker. This also helps you to build your home equity back up.
One Monthly Payment
When you refinance your mortgage for debt consolidation, you are simplifying your monthly repayments. Instead of paying a few different payments towards different credit accounts each month, all with different, and much higher interest rates, debt consolidation means one monthly payment to keep track of.
You Can Improve Your Credit Score
Debt consolidation can help boost even a damaged credit rating because you are paying off all of those high-interest rate debts. Where credit bureaus are concerned, a debt that is fully paid off shows that you are capable of handling those debts.
Tips for Refinancing
Before opting to refinance your mortgage for debt consolidation, it's important to determine if it is the right option for you. Doing research, going over your budget and spending habits, and speaking with your Atlanta mortgage lender is the best way to start. We can help you review your current mortgage package to find you a better one, as well as find out what disadvantages and advantages there may be.
It's also important to look at the different types of interest rates available to you at the time of refinancing, such as choosing between a fixed or variable interest rate. Other things you will need to take into consideration are whether you are consolidating all of your current debts or just the higher interest rate ones. Lastly, you will need to consider how long you plan on living in the home that the mortgage is being taken out on. This can help determine which rate type is best for your situation.
Consolidating your debts with a mortgage refinance has its advantages, however, it is also a large commitment and needs to be considered carefully. If you are considering consolidating your debts through a mortgage refinance, give our Atlanta mortgage lender team a call today and we'll help find the best refinance package for you.