If you currently have a significant amount of debt and you own your current residence, you may be looking for some ways to reduce the overall amount of money that you owe. One solution to managing your debt while also lowering your monthly mortgage payments at the same time is refinancing your mortgage for a better rate or term. If you own a home in Jacksonville, Florida, and want to learn more about saving money with your home financing, North Star Mortgage Network, Inc. can help. Read on to learn more about refinancing your home loan to help consolidate your debt.
Debt Consolidation: Essential information
Consolidating your debt helps make paying it off more affordable by combining your monthly payment obligations and helping to save you more money in the long run by reducing multiple monthly payments into one sum. When you begin to consolidate your debt, you will want to prioritize paying off debt that has the highest interest first, like car payments, credit cards, etc. by taking out a loan with a lower interest rate. When you consolidate your outstanding debt balance with a mortgage that has a low interest rate, it decreases the amount of money you pay for monthly mortgage payments, providing you with more funds to pay other debts. Home loans can help a borrower save more money when consolidating because they offer lower interest rates than most other kinds of loans and credit cards.
Exploring Your Refinancing Options When Consolidating Debt
There are many different types of refinancing options to consider that could help you to consolidate your debt, including:
- Rate and term refinance – This allows a borrower to obtain a new mortgage with a better rate and term length. By getting a good interest rate on a longer term loan, a borrower can lower the amount of their mortgage payment and pay off debt with the excess funds.
- Cash-out refinance – With this type of refinance, a borrower exchanges their home equity for a cash payout. Your old mortgage is replaced by a new one with a higher balance in exchange for money. A borrower then continues to make mortgage payments, but can put the supplemental cash towards other debt.
- Home equity line of credit (HELOC) – This lets a borrower withdraw funds from their home, allowing them to borrow money whenever it is needed. The borrower makes a payment whenever there is a balance due.
Assistance With Refinancing Your Mortgage To Help Consolidate Debt
If you are looking for ways to consolidate your debt and want to learn more about how to do that with a mortgage refinance in Jacksonville, Florida, contact North Star Mortgage Network, Inc. today for a consultation.