Cash-out Refinance/Debt Consolidation
Cash-out/Debt consolidation is a form of debt refinancing that involves taking out one loan to pay off other loans. The process can secure a lower overall interest rate to the entire debt load and provide the convenience of servicing only one loan. While most of this debt is from mortgages and student loan, some of it was from credit card debt. Credit cards and other unsecured credit can costs you a large amount of money each month in interest payment. This is money that can be used or saved. Getting a consolidated loan is not just so you only have to pay once a month. What it offers is a chance to pay off your entire debt at a lower interest rate. That means you can put down more than the minimum monthly payment and pay the whole amount off faster. The other advantage is that if you consolidate your loans soon enough, you can avoid - or at least minimize - the dent to your credit rating.
With the high interest rates credit card companies charge, falling behind on only a few payments can lead to a seemingly insuperable debt load. This can become very awkward within no time and you may start losing your sleep as well. To get rid of the burden, you may end up planning to sell some stuff and to take a part-time job, but there are other ways to ease out the situation as well.
Cash-out/Debt consolidation loans help you settle debts so you can streamline your finances with one regular payment. As the name suggests, you consolidate all your debts into the one loan, so you only have one payment to make each month.
Most cash-out/debt consolidation loans are offered by lending institutions such as banks, credit unions and private lenders. The overall lower interest rate is an advantage of the debt consolidation loan offers consumers. However, if you have a low credit rating, you may have trouble getting approved.
Home equity is the difference between what your property is worth and what you owe on it. If your home is currently worth $300,000, for example, and your mortgage balance is $200,000, then you have $100,000 of equity. In this case you can do a cash-out refinance to pay off your credit card debt. This can be a very efficient repayment method if you can manage it properly and do not continue your bad financial habits and charge the credit cards back up.
If you are under credit card debt and you wish to see if you qualify for a cash-out refinance, contact Kara Lowrie, President now. We'll assist you in every possible way to find the best possible solution for your unique situation. Each loan type has a maximum percentage of the value that may be pulled out.
