Refinance Your Mortgage for Debt Consolidation

by Kelly Richardson
Loan Page Columnist

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If you are under a mountain of bills that you just can't seem to get a hold on, there is a way out. If you have equity in your home, you can refinance you current mortgage for debt consolidation. Here's how.

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According to CardWeb.com, a national debt statistics compiler, Americans carry, on average, $5,800 in credit card debt from month to month. This kind of debt can cripple your finances and end up costing you more money than your initial charges. By utilizing the equity in your mortgage, you can refinance and pull out cash for fast debt consolidation with cash-out refinancing.

Refinance Your Mortgage

Debt consolidation holds a variety of benefits that you are sure to love. Here are the reasons why you might want to refinance your mortgage for debt consolidation:

» Lower Interest Rate. If you can refinance at the right time, you will be paying a loan with a lower interest rate than high-APR credit cards.
» Part of Your Mortgage Payment. Instead of sending several payments to several credit card companies, you will be paying only your loan with your mortgage payment each month.

Should you decide to refinance your mortgage with cash out, there are some things you should be aware of that will help you pay off your high-interest credit cards.

Debt Consolidation Tips

Following these debt consolidation steps will ensure that you make the most of your cash. And just think about how good you'll feel when those credit card debts read zero.

» Pay Off Higher APRs First. Hit the credit cards with the highest annual percentage rate first, because they are doing the most damage.
» Use All of the Money. Resist the temptation to refinance your mortgage and then buy impulse items. Use your money on your debts.
» Stay Out of Debt. Many people refinance their mortgage and then work themselves right back into debt. Remember where you came from and resist the temptation to recharge.

Ask your mortgage professional about debt consolidation through cash-out refinancing. Take back control of your financial life.

About the Author

Kelly Richardson covers the local education and technology scenes in major cities across the country. His articles appear in a variety of respected educational journals, periodicals, and e-zines. Kelly holds a bachelor degree in English and master degree in education from Georgia State University.

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