Refinancing mortgage loan debt consolidating
Borrowers should consider total interest expense over the life of their new mortgage when evaluating if a debt consolidation refinance makes sense.
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According to the Consumer Financial Protection Bureau, mortgage lending between August and October 2016 was up nearly 50 percent over last year, “unusually large number likely due to a high rate of mortgage refinancing.” There are many reasons you might consider refinancing your mortgage.
Cashing out on a refinance could provide you find the money you need to get the job done.
You might also consider a mortgage refinance to help consolidate some of your high interest debt from credit cards or student loans. Today we’ll explore when refinancing a mortgage is a smart decision, and when it’s mathematically unwise.
So a debt consolidation refinance can have the double benefit of lowering your monthly debt expenses and improving your ability to qualify for a refinance.
We’ll do this by looking at the cold, hard numbers and walk you through the process if you decide it is an avenue you’d like to pursue.
As of this posting, the national average interest rate is at 4.15%.
Before you apply for a debt consolidation refinance make sure that the value of your home is sufficient to support the mortgage amount you are seeking, otherwise you could exceed the lender's In most cases a debt consolidation refinance lowers your total monthly debt payments but borrowers should be careful before they replace short term debt such as a credit card or car loan with long term debt such as a mortgage.
When you replace short term debt with long term debt you extend the length of the short term debt which usually costs you significantly more money in total interest expense over the life of the loan.