Debt Consolidation

If you have enough equity in your home, you will be able to pay out high interest debt through a refinance. For example, if you have a number of outstanding debts, such as a car loan, an un-secured line of credit, or a high amount outstanding on a credit card, you may be able to consolidate all of them through mortgage refinance. Consolidating these debts into a mortgage, not only reduces the interest rates you are paying but can also reduce monthly payments and increase your cash flow.

 

A review of your current financial situation will determine if debt consolidation will work for you. There are a number of considerations to be taken into account – current interest rates, legal fees, mortgage insurance, term left on existing mortgage and penalties.

Here is an example of what a debt consolidation can do to you:

Current Debt             Outstanding Amount     Interest Rate     Monthly Payment
Mortgage $500,000 3.75% $2,563
Credit card $15,000 19.99% $450
Line of Credit                 $20,000 7.5% $600
Car Loan                     $12,000 4.99% $320
Total $547,000 $3,933

 

Current Debt             Outstanding Amount     Interest Rate     Monthly Payment
Mortgage $547,000 2.59% $2475
Credit card 0
Line of Credit                 0
Car Loan                     0
Total $547,000 $2475

 

In this case, you are able to reduce the monthly payments to $2,475 and increase cash flow by $1,458.

 

Feel free to Contact Us for a free analysis and consultation.

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