Debt consolidation can have many advantages to your finances, by compiling several debts which are covered by a single loan.
Homeowners can refinance their mortgage to consolidate debt and compile multiple debts into a single payment. First, you must decide which debts to consolidate, and seek out a loan to pay off all those debts.
Following the application and approval process, your lender will disburse funds to you to pay off your loans or, lenders can send your proceeds directly to your creditors for you to begin paying off the new loan.
Cash-out refinancing involves taking out a new mortgage which exceeds your current balance, thereby converting some of your equity to cash, which you can then use to pay off high-interest debt. For example, if you have $60,000 left on your mortgage balance, and you take a $80,000 cash-out refinance, you get $20,000 in cash to consolidate other debts.
Cash-out refinances come with slightly higher interest rates than rate-and-term refinances because you’re taking out more money. Therefore, comparison shopping for the best rates is vital. At Juno Mortgages, we will help you shop around for the best refinancing rates for your mortgage, and help you leverage your debt consolidation strategy to find the best interest rate possible to fit your needs.
Will my debt-to-income ratio allow me to qualify for debt consolidation options?
How will my credit score affect my debt consolidation options?
What are the potential drawbacks of debt consolidation, and will it raise the risk of foreclosure?
Juno Mortgages will be happy to find a debt consolidation plan that works for you.
