Consolidate My Debt
Homeowners have discovered that refinancing a home loan to consolidate debt can be a resourceful approach for lowering total monthly bill payments. Debt consolidation often involves combining higher interest credit cards, secured and unsecured loans, and the mortgage into one convenient payment. For many homeowners, the potential savings can be significant.
Refinancing a home loan to consolidate debt can be a wise decision. Here are some tips to help you make the most out of it.
Tip #1 – Ask yourself what you want to accomplish besides consolidating your debt.
Do you want to pay off credit cards only … or the car and student loans, as well?
You might discover that you’re able to get a better interest rate for such expenses through debt consolidation and refinancing your home loan.
Do you want to lock in a fixed interest rate for the life of the loan or do you want the lowest rate and payment for the next 2-3 years?
If you plan to keep your home and loan for the long term, refinancing to a fixed rate mortgage for the entirety of the loan might be a right choice for you. But maybe you anticipate moving in a few years and it makes more financial sense to refinance to an adjustable rate mortgage and take advantage of lower initial payments.
Tip #2 – Anticipate future needs.
Maybe you’ll need cash for home repairs or to pay for your child’s college tuition? If you’re already consolidating your debt, you may want to consider any other anticipated expenses. Maybe your son or daughter is getting married and you want to help with the wedding costs. Perhaps you need to repair a leaky roof before the next rainy season. Or maybe you just want to treat yourself to a vacation you so deserve. Consider these factors as you begin the process of refinancing your home loan to consolidate your debt. If you’re already planning to refinance your loan, you may want to try to get enough cash to help you pay for anticipated future expenses.
Tip #3 – Shop for a lender, not just a loan.
When you’re shopping for a loan, it’s not just about the rates and payments – it’s also about the lender you choose. After spending so much time on researching the various aspects of the loans, it also makes sense to research the lenders. Look for a lender with a solid history and satisfied customers. Lean towards large, reputable companies. Large, well-known companies operate under the watchful scrutiny of financial regulators – like Secured Residential Funding.
Tip #4 – Ask for a consultation
If you have a shortlist of lenders, call and ask for a free consultation. They can help you sort through the options and find a loan that meets your needs. Ask for details and listen to their answers. This is a great way to help you research your options and it can help you evaluate the lender’s customer service skills!
