Debt Consolidation Loans
Debt consolidation loans are the primary reason people refinance. Debt consolidation loans are more popular with homeowners due to the increases in minimum payment amounts required by credit card companies. Families are experiencing large increases in their monthly payments without adding new debt. In many areas, property has substantially appreciated in value, and many of my clients decide to use the "dead equity" for debt consolidation. Of course, your debt consolidation loans payment ay be tax deductible and your credit card payments are not, you are using "tax advantaged" debt to improve your overall financial picture. I offer many debt consolidation loans to unlock the equity in your home and reduce your payments. Before you make any decision on a mortgage, a Debt Consolidation Loans Certified Mortgage Planning Specialist can do a detailed analysis so you know you are making the right choice based on your specific circumstances. I now offer a free Debt Consolidation Loans Analysis which can give you the information you need to make an informed decision.
With debt consolidation refinance loans, we determine the current balance of your mortgage, and the amount of debt you want to pay off plus any closing costs (remember, I do not charge origination fees so these costs are as low as possible). The total will be our new loan amount. Next, an appraiser will determine the value of your property which will be used to determine your Loan to Value (LTV). We have loan programs which will allow you to borrow 80,90, or even 100% of the value of the home in this "Cash Out Refinance" transaction.
One way to make a refinance work for you is to refinance for more than the balance remaining on your old mortgage -- in effect, tapping your home equity, or "cashing out," . Thanks to favorable rates, you may be able to do so without boosting your monthly outlay. For example, at 8.5%, the payment on a $200,000, 30-year fixed-rate mortgage is $1,538. But at 7.5%, that same payment lets you borrow nearly $20,000 more.
The best way to use the extra cash is to pay off any higher-rate loans you may have. Let's say that you are carrying a $15,000 car loan at 10% and are also making minimum payments on a $10,000 credit-card balance at 17%. Your monthly payments on those debts would total $680. Then assume you refinanced your mortgage, taking out an additional $25,000 to pay off your car and credit-card loans. Result: At 7.5%, your additional monthly mortgage payment would be only $175, so you would come out $505 ahead ($680-$175=$505).
Of course, all the extra cash needn't go for paying off debts. One recent client swapped their ARM for a fixed-rate last December, they also increased their mortgage by $34,000, from $106,000 to $140,000. They used $2,000 of the proceeds to pay their refinancing costs and another $18,000 to pay off a 10% home-equity loan, which had been costing them $250 a month. They spent the remaining $14,000 to build a garage and did all this for just another $19 a month.
Learn more about debt consolidation loans closing costs.
Calculate your " Debt Consolidation Loans Payback Period" to verify refinancing makes sense in your specific situation.
* I have included a section on the new Cash Flow Debt Consolidation ARM. A LIBOR based product which gives you complete flexibility in managing your mortgage.
I also offer a debt consolidation calculator which should be useful.
Learn more about "No Cost Refinance" options.
More about how to eliminate PMI
We offer you the ability to refinance into several unique programs accommodating borrowers with non traditional income or asset situations. Please visit my No Documentation loans page.
I have included a page on mortgage documentation requirements which may be useful
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As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your finances are structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
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Prequalify for your Debt Consolidation Loans.