Bills are something that everyone has to deal with, but sometimes they can become overwhelming and make us feel like we are drowning. Refinancing to consolidate all of your debts is an option that is often referred to as a “cash-out” refinancing loan. This type of loan allows the homeowner to trade in their equity for cash to use on other bills.
Instead of paying monthly payments on a mortgage, on student loans, and on three different credit cards, this option combines them into one larger bill. The bills still need to be paid of course, but instead of juggling a plethora of due dates and deadlines in your mind, you can focus on one date to pay the bills. This will save you a lot of time trying to organize the bills that need to be paid and a lot of money as well.
Making the process of paying bills much simpler can, in effect, save a homeowner a lot of money and lower the monthly payments in the process. Many mortgage loans have a lower interest rate than many of the major credit card companies and student loan companies. In fact, the typical interest rate for a credit card now is between 13 and 15 percent, when a mortgage interest rate is usually between three and five percent. Refinancing the mortgage and consolidating all of the bills could make the interest rate drop even lower, – if your credit score is up to par of course.
To top it all off, paying off the higher interest rates at a faster rate of time will result in a better credit score. Also, consolidating your bills into your mortgage is a tax deduction that is not an option when the credit card companies are paid off through normal means.
For debt consolidation in Washington DC, Maryland and Virginia, call First Meridian Mortgage Corporation today at 703-799-5626 to speak to one of our experienced loan officers.