DEBT CONSOLIDATION REFI

Debt consolidation refi loans are a great way to reduce pay off your total debt sooner by lowering your interest rate on the new loan.   Most mortgage refinances are done to get a lower interest rate that will reduce either the monthly payment or the length of the mortgage term.  A debt consolidation refi is typically done to combine a second mortgage or other unsecured debt into your existing mortgage with a lower interest rate.  Often, your new payment will be the same or lower than your existing mortgage loan.

MORTGAGE REFINANCING

Refinancing your current home mortgage can be worthwhile for several reasons:

• If you purchased your current home when rates were high, refinancing for a lesser rate may actually lower your monthly payment, saving you tons of cash. 


• Refinancing your home and receiving cash at closing is another attractive feature to allow you to remodel, add-on or make other major purchases.


• Refinancing your home and eliminate extra monthly payments by consolidating that debt into your new home mortgage loan debt provides interest savings but also may have tax benefits.

CREDIT CARD DEBT RELIEF

You can trade in your double digit credit card interest rates for a low single digit mortgage interest rate. Plus, those non-tax deductible credit card interest payments now may become tax deductible. You will want to check with your accountant or tax professional to see if tax deductibility will apply to your personal situation.

REFI INTEREST RATES

To get the most out of your debt consolidation refi, decide if you want one or two mortgages. By refinancing your original mortgage and combining all your debt into this new mortgage you will generally get the lowest overall interest rate. But if you have a lower mortgage interest rate than what is now available, or what you may now qualify for, then it might be better to take out a home equity loan which is called a second mortgage.

The home equity loan often will have a higher interest rate than mortgage rates but, having two separate mortgages may end up being cheaper for you.

Adjustable rate mortgage and home equity loans offer low payments, but there is the chance that your interest rate could increase which will increase your monthly payment. Fixed rate loans provide you security of knowing that your interest rate and monthly payment will always be the same no matter what the economy does.

DEBT CONSOLIDATION REFI LOAN TERM

Selecting the right debt consolidation refi loan term is just as important as getting the lowest interest rate when trying to reduce your monthly payments. Ideally, you want a short term loan to get out of debt sooner. This does not’t necessarily mean higher payments though. If you get a lower interest rate you may be able to select a shorter loan term and get the same monthly payment as you have now.

DEBT CONSOLIDATION LENDER

Choosing a reputable debt consolidation refi lender should not be done hastily or without some research.  Each lender will have their own formula for determining the mortgage interest rate, points and closing costs. To make sure you are getting the best deal for your debt consolidation refi review lender sites and request quotes before making a final decision.  You can then make side-by-side comparisons to select your best option.

Not doing some up-front leg work will cost you thousands on your new loan’s cost. The key to refinancing is getting a low interest rate with the lowest possible closing costs. You should always attempt to get some loan fees waived. If you are a loyal customer your current lender may waive normal title search or application fees. You may be able to save hundreds of dollars on your closing cost, if you just ask.

SELECTED ARTICLES AND RESOURCES

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