Have you thought about refinancing your home to gain a little extra cash? It is time to seriously consider what this move could do for you, especially if you are suffering from late or missed payments. When debt becomes overwhelming and creditors are knocking at your door it is almost too late to correct your situation. In an ideal setting you will act before this occurs. This is why you should think about a debt consolidation refinance loan.
Debt consolidation refinance takes the equity you have in your home and applies it towards those unmanageable debts. You can lower your interest rates and monthly payments. Keep in mind that you may not always see a lower monthly payment, but one interest rate is certainly lower than five separate rates at 15 percent.
The first question to ask is whether you have any equity in your home. Equity is the value of your home less any outstanding mortgage. If you have paid on your mortgage for a couple of years and you have not been hit with a devaluation of property you most likely have some equity. Is the amount of equity enough to pay your debts? If so, it is time to consider the debt consolidation refinance. Even if you can cover more than half the debts you have a debt consolidation refinance is a viable option.
Any time you use a debt consolidation refinance you will have closing costs. These closing costs can take away from the equity you have available. Typical closing costs range from $1000 to $3000 depending on the mortgage company. Research the mortgage companies to find the one that offers you the lowest interest rates and best closing costs.
A debt consolidation refinance is going to take your existing mortgage and recreate it. It will envelope the equity you take out into one loan. This is different from a home equity loan. A home equity loan is a second mortgage. You are better off with a refinanced loan to have one mortgage payment rather than two. It will also save you money in the end.