A debt consolidation cash out refinance is a type of mortgage that allows you to borrow money against your home’s equity to pay off other debts, such as credit card debt. This can help improve monthly household cashflow by lowering the total amount of a household’s monthly bills each month. Mortgage interest rates remain staggeringly lower than credit card interest rates. Between the impact of inflation, more expensive groceries, and increased cost of living, CNN reports that the American debt load has surpassed $17t for the first time ever, so if this is a struggle, know that you aren’t alone.
To qualify for a debt consolidation cash out refinance, you will need to have a sufficient amount of equity in your home, among other things. Fortunately, home values have increased drastically in the past three years. If you are struggling with credit card debt, a debt consolidation cash out refinance can be a good option for you.
Here are some of the benefits of a debt consolidation cash out refinance:
- You can save money on interest. The interest rates on mortgages are typically lower than the interest rates on credit cards. This means that you can save money on interest by consolidating your credit card debt into a mortgage.
- You can simplify your monthly payments. Instead of having to make multiple payments to different creditors, you can make just one payment to your mortgage lender. This can help you budget your money and make it easier to keep track of your finances.
- You can improve your credit score. By paying off your credit card debt, you can improve your credit score. This can make it easier to qualify for other loans in the future, such as a car loan or a personal loan.
If you are considering a debt consolidation cash out refinance, it is important to weigh the pros and cons carefully. It is also important to talk to a mortgage advisor in order to get personalized advice.